Eco-innovation in Denmark - 2016-2017 EIO Country Profile - European Commission
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Eco-innovation in Denmark EIO Country Profile 2016-2017
Eco-Innovation Observatory The Eco-Innovation Observatory functions as a platform for the structured collection and analysis of an extensive range of eco-innovation and circular economy information, gathered from across the European Union and key economic regions around the globe, providing a much-needed integrated information source on eco-innovation for companies and innovation service providers, as well as providing a solid decision-making basis for policy development. The Observatory approaches eco-innovation as a persuasive phenomenon present in all economic sectors and therefore relevant for all types of innovation, defining eco-innovation as: “Eco-innovation is any innovation that reduces the use of natural resources and decreases the release of harmful substances across the whole life-cycle”. To find out more, visit www.eco-innovation.eu and ec.europa.eu/environment/ecoap Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect the position of the European Commission.
Eco-Innovation Observatory Country Profile 2016-2017: Denmark Author: Henry Varga Coordinator of the work package: Technopolis Group Belgium
Acknowledgments The document has been prepared with the kind support of: Mr. Niels Henrik Mortensen (Danish Ministry of the Environment - Danish EPA), Ms. Signe Kromann-Rasmussen (Danish Ministry of the Environment - Danish EPA), Mrs. Hanne Juel (Central Denmark Region/ Midtjylland), Mr. Morten Christensen (Danish Regions), Mr. Christoffer Trojaborg Julian (State of Green) and Mr. Steffen Max Høgh (3R Kontor ApS). A note to Readers Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect the position of the European Union. A number of companies are presented as illustrative examples of eco-innovation in this report. The EIO does not endorse these companies (Nordregio, n.d.a) The report is based on an updated methodology for calculating the Eco-Innovation Index, which has also been applied retroactively to all previous years, hence the outcome in the Eco-Innovation Scoreboard (Eco-IS) for 2017 presented in this report can be compared with the analysis in the previous reports to a limited extent. Comments and suggestions on this document can be sent to Asel Doranova asel.doranova@technopolis-group.com This brief is available for download from https://ec.europa.eu/environment/ecoap/country_profiles_en
Table of contents
Summary…… .............................................................................................................. 1
Introduction ............................................................................................................... 2
1 | Eco-innovation performance .............................................................................. 3
2 | Selected circular economy and eco-innovation areas and new trends ............... 10
3 | Policy landscape: towards circular economy in Denmark .................................. 21
4 | Barriers and drivers to circular economy and eco-innovation in Denmark ......... 14
ANNEX: Policy measures addressing circular economy and eco-innovations in Denmark
………………………………………………………………………………………………………………….42Summary
Denmark ranks fifth (5th) in the overall 2017 Eco-IS, behind Luxembourg, Germany, Finland and
Sweden on first place. This is a slightly lower ranking compared to the fourth position in 2016 and
third position in 2015. Overall, since the first Eco-innovation scoreboard in 2010, Denmark has
never been ranked below fifth place. For the period 2014-2017, Denmark has been in the same
cluster of five top scoring countries mentioned above. In terms of eco-innovation output,
compared to 2015, Denmark slides down the ranking from third place to fourth (4th) in the
scoreboard, while it retains a second (2nd) spot in terms of eco-innovation input, which is also
Denmark’s best performing indices. Denmark improves in terms of eco-innovation activities,
where it moves up from twenty-first (21st) to eighteenth (18th). As in the previous report, the
country does seem not manage to translate the high eco-innovation output into a higher socio-
economic output, where it drops from fifteens place (15) to twenty-fourth (24th).
Denmark has been promoting eco-innovation since 2006 and has decided to be a low-emission
society in 2050, independent of fossil fuels, backed by an ambitious policy framework through a
multiple-solutions approach. 2017 saw electricity production with the lowest CO2 emissions in
history, reaching for first time below 200 grams CO2 per day and kilowatt hour (Danish Ministry
of Energy, Utilities and Climate, 2018d). 2017 was also a record year for Danish wind power, with
43.4% of Denmark's electricity consumption supplied by wind power (Danish Ministry of Energy,
Utilities and Climate, 2018a). With the 2007 Danish Local Government Reform (creating five
completely new regions), green growth initiatives got off and the regions are today heavily
involved in the circular economy transition and there is an increasing positive attitude towards
circular economy amongst the population and businesses. Denmark’s pledge to circular economy
goes beyond its borders and sees this as an economic opportunity for the country through export
of Danish environmental technology and services and has capitalised on its reputation as a
frontrunner in green solutions, signing numerous partnership agreements with governments at
regional and national level around the world (see StateofGreen.com). Furthermore, Denmark is a
long-standing member of the Circular Economy 100 network (CE100), a global platform run by
the Ellen MacArthur Foundation 1 and in 2015 Denmark was awarded the World Economic Forum’s
Young Global Leaders award ‘The Circulars’2 for being a global front-runner in exploiting the
potential of circular economy. The current Danish Government is committed to support an
ambitious green change in a sustainable and efficient way, where consideration for Danish jobs
and competitiveness goes hand in hand with environmental and climate considerations.
(Regeringen, 2016). The government sees itself at the forefront of the green change and wants
that the life-cycle perspective is more part of the decision-making basis for public investment and
procurement. In line with these policies, the Danish government established the Advisory Board
for Circular Economy in 2016, consisting of 12 business executives (including representatives from
SMEs). This more market-oriented policy may have impacted the indicator governments
environmental and energy R&D appropriations and outlays (Share of GDP), where Denmark
scores below EU average for the first time.
1 www.ellenmacarthurfoundation.org/ce100
2 https://thecirculars.org
1Introduction
Denmark is a modern economy with high dependence on foreign trade. With high level of
material flows, the mixed economy of Denmark relies almost entirely on human resources, where
the service sector makes up the vast amount of the employment and economy. GHG emissions
are low and are continuing to decline and there is evidence that a decoupling between growth in
GDP and growth in greenhouse gas emissions has taken place. The main factor is that the share
of renewable energy in final (gross) energy consumption is increasing and has surpassed the
national target of 30% for 2020. Transport sector negatively affects the air and is a major
contributor of pollutants. Only a quarter of the Danish rail network is electrified and
electrification is a major priority for the rail industry in Denmark. Denmark has pledged to close
all its coal fired plants by 2030 and is making good progress towards a low-carbon society
independent of fossil fuels by (IEA, 2017).
Taking a more market-oriented approach, the current Danish Government places strong
emphasis on cost-effectiveness of measure to manage environmental sustainability which
permeates almost all new policy documents since mid-2015. While there is no direct national
funding to circular economy (CE), the Government established the Advisory Board for Circular
Economy and the Energy Commission and it’s still needs to be seen how much of their
recommendations will be translated into concrete national policy initiatives in the near future,
although there are positive signs like the recent strategy on sharing economy. Local and regional
governments are continuing their work and are developing CE strategies as well as intensifying
public-public and public-private cooperation. Cooperation across sectors is in general a strong
factor in Denmark and the attitude towards CE is very positive and interest in applying CE
principles among Danish companies is high. Denmark also cooperates through the Nordic Council
of Ministers on Nordic Bio economy, which is about green transition.
Danish economy is performing well and the outlooks is promising, with real GDP growth driven
by net exports, private consumption and investment. Despite stiff competition in Danish flagship
sector of wind turbine manufacturing, Danish companies are doing very well and interest for
Danish environmental technology, services and cooperation is strong. Employment is robust,
particularly in services sectors, although there are some clouds in the horizon in terms of capacity
constraints and boosting investment, productivity growth and labour supply remain key
challenges. The downside of the economic growth is that it puts higher pressure on resources.
Denmark has some of the highest governmental spending on education in Europe, it does not
translate into high productivity and the green business sector is lacking the right skills and
capabilities. This could be explained by the low levels of unemployment Denmark in recent years
which leads to higher demand for skilled labour in general. The Danish Government has launched
a number of initiatives in 2016 to boost labour supply, improve the business environment and
increase productivity and according to the Global Competitiveness Indicator Denmark is among
the best performers in the EU in terms of ease of doing business. Furthermore, initiates have
been taken to better coordinate higher education and research with industry and business for two
reasons: 1) to better match choice of education with the needs of the market; and 2) increase
commercialisation of research and innovation.
21 | Eco-innovation performance
The analysis in this section is based on the EU 28 Eco-innovation Index (EcoI Index) for the year
2017. The Eco-innovation index demonstrates the eco-innovation performance of a country
compared with the EU average and with the EU top performers. EcoI Index is a composite index
that is based on 16 indicators which are aggregated into five components: eco-innovation inputs,
eco-innovation activities and eco-innovation outputs as well as environmental outcomes and
socio-economic outcomes
With an overall score of 120, the 2017 Danish eco-innovation performance scores a fifth place,
down from a third place compared to 2015 (index 131) and a fourth place in 2016 (index 129).
Ahead of Denmark is Finland (index 139), Luxembourg (index 139), Germany (index 141) and on
first place Sweden (index 143), in the list of EU28 member states (EU average at 100), as illustrated
below in Figure 2.1. Denmark has never been ranked below fifth place in the Eco-innovation
scoreboard 2010-2017.
Figure 2.1 EU27 Eco-innovation Index 2017, composite index
Source: EIO, 2018
Figure 2.2 illustrates the 5 main components behind the Eco-Innovation Scoreboard Index; Eco-
Innovation Inputs, Eco-Innovation Activities, Eco-Innovation Outputs, Resource efficiency
Outcomes and Socio-Economic Outcomes.
Most notably is that for every year 2010-2017 Denmark has constantly been among the top three
countries in eco-innovation inputs (scoring first place in 2016) and between third and fifth place
3in eco-innovation outputs. This comes as no surprise considering the broad political consensus
across parties to move Denmark towards a green economy to become independent of fossil fuels
by 2050, regions and local authorities are progressively incorporating circular economy into their
strategies and there is an increasing willingness and interest amongst Danish enterprises to
participation and contribute to a paradigm shift from a linear economy to a circular economy. On
the other hand, it is interesting to observe that Denmark does not manage to translate the high
level of eco-innovation inputs and eco-innovation output into higher socio-economic outcomes.
In the latter case there is been a downward trend since 2010.
Table below shows the historical ranking (according to the new methodology) for the five
indicators 2010-2017.
2010 2011 2012 2013 2014 2015 2016 2017
Eco-innovation inputs 3 2 2 3 2 2 1 2
Eco-innovation activities 5 11 12 3 21 21 19 18
Eco-innovation outputs 3 5 4 4 5 3 4 4
Resource efficiency outcomes 11 11 6 7 6 7 5 8
Socio-economic outcomes 3 13 13 10 20 15 23 24
Figure 2.2 Components of the Eco-innovation index for Denmark 2017
Source: EIO, 2018
4Eco innovation inputs – best performing indicator
The eco-innovation inputs are based on Governments environmental and energy R&D
appropriations and outlays, total R&D personnel and researchers, and total value of green early
stage investments. This is by far Denmark best performing indicator, ranking 2nd in 2017 (index
178), below Finland (index 200) and never below a 3rd position since 2010. Noticeable is that the
Finland ranks 1st in seven out of eight years between 2010-2017, Denmark taking first position in
2016 (index 189). Furthermore, four countries are recurring in the top five since 2014: Finland,
Denmark, Germany, and Sweden. Both in Total R&D personnel and researchers and Total value
of green early stage investments Denmark ranks first place every year since 2014. Total R&D
personnel and researchers has never been below 4th position (2010), while for green early stage
investments Denmark shared the top spot for 2014 (Ireland, Luxembourg), 2015 (Finland, Ireland,
United Kingdom) and 2016 (Germany, Ireland).
The governments environmental and energy R&D appropriations and outlays (per cent of GDP),
in 2017 (2016 data) was 0.033% (index 0.51) down from 2015 (2014 data) figures of 0.050% (index
0.53). This ranks Denmark on 8th below EU average of 0.037% (index 0.57) and behind Czech
Republic 0.040 % (index 0.62), Slovenia 0.042% (index 0.66) and Sweden 0.05% (index 0.74).
Finland, Germany and Portugal sharing first spot with 0.064% (index 1.00). In comparison, total
Government Budget Appropriations and Outlays for R&D (per cent of GDP) was 1.01% in 2016 and
1.09% in 2014 (Statistics Denmark, n.d.) respectively. Denmark ranks 1st in R&D personnel and
researchers share of total employment with 2.19% (index 1.00) in 2017, ahead of Luxembourg
with 2.01% (index 0.90), Finland 1.99% (index 0.89) and Sweden with 1.91% (index 0.85). This is
well above EU average of 1.32% and index of 0.52. In comparison to 2015 figures, Denmark had
2.16% (index 1.00) with and EU average of 1.25% (index 0.50). Denmark takes the top position for
the amount of total green early stage investments in 2017 (period 2014-2017) with an of USD
121 (index 1.00) per capita, ahead of Finland (USD 113, Index 0.93), Germany (USD 97, Index 0.81)
and Sweden (USD 89, Index 74). In comparison Denmark invested USD 159 per capita in 2015
(2012-2015 figures). The EU average for 2017 is USD 38 per capita (index 0.31) and USD 71 (index
0.45) respectively. According to a benchmark analysis done by the state investment fund Danish
Growth Fund (Vækstfonden), where the Danish market is compared with 15 other European
countries, Denmark is ahead in terms of investment activity as well as at the forefront in terms
of early stage investments (Vækstfonden, 2017). However, when it comes to the venture capital,
venture companies' ability to attract capital and direct public venture investments, Denmark ranks
9th, 8th and 12th respectively. Notable is that Denmark’s public direct venture investments account
only for approximately 5% of total investments. By comparison, in Portugal more than 70% comes
from total public investment. In 2016 the Danish Growth Fund and the European Investment Fund
(EIF) signed an agreement to launch the Danish compartment of European Angels Fund (EAF
Denmark), which will support business angels’ SME financing activities through co-investments
(European Investment Fund, 2016).
Eco innovation activities – fourth performing indicators
Eco innovation activities are based on Firms having implemented innovation activities aiming at a
reduction of material input per unit output, Enterprises that introduced an innovation with
environmental benefits obtained by the end user and ISO 14001 registered organisations. In 2017
Eco-IS, Denmark ranks 18th (index 58) up from 21st place in 2015. Top three performing countries
are Sweden (index 148), Germany (index 151) and Finland (index 155). Note that for two of the
5indicators3 the data dates back to 2008 for all the 2010-2015 Eco-IS. In addition, six countries had
no data available for this period, including Denmark. For the 2016 and 2017 Eco-IS there is new
data (from 2014), including for Denmark, still there is no data available for six countries: Belgium,
France, Ireland, Netherlands, Spain and the UK. This has two consequences: 1) It is not possible
to read any trends how Denmark is performing; and 2) missing country data does not mean that
these activities do not take place in these countries, hence if data would have been available this
could affect the EU average and ranking of Denmark and the overall picture.
For Firms having implemented innovation activities aiming at a reduction of energy input per
unit output Denmark scores a 15th place with an index of 0.26, below EU average of 0.53. Top
three are Portugal (index 0.79), Austria (0.81) and Germany (index 1.00). For Enterprises that
introduced an innovation with environmental benefits obtained by the end user, Denmark ranks
13th (index 0.28), below EU average (index 0.50). Top three position are taken by Germany (index
0.95), Austria (index 0.97) and Finland (1.00). In terms of ISO 14001 registered organisations
Denmark ranks 17th with an index of 0.24, below EU average 0.30. Top three countries in 2017 are
Slovakia (0.76), Italy (0.79) and Malta (1.00, in 2016 Malta scored only 0.05). The low score for
Denmark can be related to that many companies in Denmark apply a strong environmental
regulation and have preferred to implement the European Eco Management and Audit Scheme,
which set stricter environmental targets and standards for the company performance than
ISO14001. For instance, while Denmark has 28 organisations and 203 sites under EMAS, Sweden
(which has about 4 million larger population) has only 17 organisations and 17 sites (European
Commission, 2017). Danish companies have also been successful in Environmental Technology
Verification (ETV), a new tool to help innovative environmental technologies reach the market.
Of the 28 verified technologies, eight are from Danish companies or 28.6% of all verified
technologies (European Commission, 2018b). Especially in the category ‘Water Treatment &
Monitoring’, half of the eight technologies are from Danish companies while in the category
‘Materials, Waste & Resources’ four out of 14 technologies are from Danish companies (there are
no Danish companies in the third category – ‘Energy Technologies’). There has been a negative
trend in EMAS-registered organisations, down from 120 in 2005 to 46 in 2015 (Eurostat, 2018d)
while EMAS-registered sites have been fluctuating between 229 and 455 (Eurostat, 2018c). The
trend in registration could be explained by companies being more attracted to ISO 14001, because
1) it is more internationally known and 2) because EMAS are seen as to bureaucratic (Mortensen,
2018). One reason why Denmark has a lower frequency of ISO14001 certifications could be the
high share of products linked to agricultural production, where producers have been more
resistant to obtain environmental standards. Although this could change as Denmark has the
biggest, proportionally, organic market in in the world, with organic food making up 9.7% of the
total food market in 2016 (Research Institute of Organic Agriculture - FiBL, 2018) and there is an
increasing in demand, both at home4 and foreign markets, for organic food products. Denmark
was the first country in the world that implemented a state control for organic food in 1987 and
has also developed the Organic Cuisine Label5, a state guaranteed label that is free and through
3 Firms having implemented innovation activities aiming at a reduction of material input per unit output, and Firms having
implemented innovation activities aiming at a reduction of energy input per unit output.
4
http://organicdenmark.com
5 http://en.restaurant.oekologisk-spisemaerke.dk
6a different range of indicators shows the total percentage of organic raw ingredients and
beverages used in preparing the entire menu in a kitchen. Furthermore, Denmark is part of the
Nordic Swan Ecolabel (established in 1989), which is one of the founders (1994) of the
international network for ISO 14024 Type 1 ecolabel (Nordic Ecolabelling, n.d.). The Nordic Swan
Ecolabel has 60 product groups and sets strict environmental requirements in all relevant phases
of a product's life cycle.
Eco innovation outputs – second best performing indicator
Based on Eco-innovation related patents, Eco-innovation related academic publications and Eco-
innovation related media coverage, Eco innovation outputs is Denmark’s second best performing
index on 4th position (index 154), right behind Sweden (index 182), Finland (index 202) and
Luxembourg (index 220). The result is on position down from 3rd place in 2015 but the same in
2016. In terms of Eco-innovation related patents, Denmark ranked 4th with 28.55 eco-patents per
million inhabitants (EU average of 15.34), behind Finland (34.38), Sweden and Germany both on
(35.46). This is one position down from 3rd place with 36.37 (EU average 17.52) in the 2015 Eco-
IS, but two positions with 34.18 (EU average 17.44) in the 2016 Eco-IS. Finland, Sweden and
German being the same main contenders at the top for those years. The trend looks like other
countries are ‘catching up’ with Denmark and seems logical as eco-innovation, and especially
circular economy practises and policies, are being developed and applied by more and more
governments, organisations and companies. Still, Denmark has twice as many eco-patents than
the average EU, which is also reflected in figure 2.2 with a high eco-innovation output. In
comparison with the lower environmental outcomes, one could question if the higher number of
eco-patents truly is contributing to a decrease in the overall flow of materials and energy. As the
Green National Accounts for Denmark 2015-2016 described, the results are mixed with setbacks
in some areas and progress in others. For instance, it states that decoupling of economic growth
and greenhouses gases which has taken place, while on the on the other hand there is no
indication of decoupling between industrial output and waste generation (Statistics Denmark,
2018). When it comes to Eco-innovation related publications (per million inhabitants) Denmark
ranks 7th (index 0.77, EU average 0.32) down from 5th place in 2015 (6th place in 2016 Eco-IS). At
the three top spots we find Latvia (index 0.93), Sweden (index 0.97) and Finland (index 1.00). With
a 21st position and an index of 0.21 (EU average 0.35), Denmark scores surprisingly low for Eco-
innovation related media coverage (per number of electronic media), as Danish media coverage
of environmental issues, in general, is high. Although this is something that affects four out five
top scoring countries for the composite index, except for Luxembourg, which shares the three top
spots with Greece and Spain.
Resource efficiency outcomes – third best performing indicator
The indicator is based on Material productivity (GDP/Domestic Material Consumption), Water
productivity (GDP/total fresh water abstraction), Energy productivity (GDP/gross inland energy
consumption and GHG emissions intensity (CO2e/GDP). Denmark ranks 8th in 2017, down from
7th in 2015 (5th in 2016 Eco-IS). Overall, Denmark has been ranked between 5th and 8th in 2012 to
2017 compared to the 11th position in 2010 and 2011, which would indicate that Denmark has
made some progress. Denmark could have ranked much better if it would not have been for the
poorer performance in material productivity (GDP/Domestic Material Consumption) which was
the only indicator below EU average on 11th position with an index of index 0.33 (EU average
0.45), up from a 15th position in 2015. This was actually the best result in term of ranking for the
72010-2017 Eco-IS period. The top three scoring countries are UK (index 0.81), Italy (0.93) and Spain
(1.00). Despite improving greenhouse gas emissions per capita (until 2015) and higher share of
renewable energy in gross final energy consumption, Denmark is struggling with, domestic
material consumption (tonnes per capita) and waste production per capita (Eurostat, 2018e). 30%
percent of total waste generation is generated by households (Statistics Denmark, 2018). Some
of it can be related to economic growth that has put higher pressure on the environment and
natural resources, and, the main factor, increase in building and construction activities (Statistics
Denmark, 2018). The latter is related to the many on-going construction projects that were
launched during the economic crisis.
In terms of Water productivity (GDP/total fresh water abstraction) Denmark ranks 8th (index
0.46, EU average 0.17). The top three countries are Malta (index 0.57) on third, while Sweden
(index 1.00) and Luxembourg (index 1.00) share the first position. In 2016 Denmark ranked first,
while It ranked 9th in 2015. However, it should be noted that water productivity in the Eco-IS for
the years 2010-2015 are all based on the same data set period, 1996-2005. The overall trend for
the last 40 years has been that the water consumption in Denmark has been reduced by more
than 30% (DANVA, 2017). The more current and future pressing problem in Denmark is the rising
groundwater levels (DMI, 2018).
In 2017 Denmark ranks 3rd (index 0.84, EU average 0.51) in Energy productivity (GDP/gross inland
energy consumption), third year in a row, just behind Malta and Ireland which share the first
position. In general Denmark score well over 2010-2017, with a best of second position in 2014
and a sixth position in 2011 and 2012. Although the overall picture is that economic growth and
the increase in private consumption were coupled by increasing gross energy consumption in
2015 and 2016. The increase in energy consumption even exceeded economic growth in 2016,
which means that energy consumption per unit of GDP also increased. One contributing factor, as
mentioned above, was that 2016 was a cold year. (Statistics Denmark, 2018)
The overall trend for GHG emissions intensity (CO2e/GDP) has been positive for the period 2010-
2017, with a 4th position in 2016 (index 0.70) and 2017 (index 0.73, EU average 0.56), up from 8th
position in 2015 (index 0.68). Top three positions are occupied by France (index (0.77), Malta
(index 0.80) and Sweden (1.00). Sweden has been ranked first for all Eco-IS with regard to GHG
emissions intensity. Unfortunately, increase in greenhouse gas emissions in 2016 broke the long-
term downward, partly due to the fact that 2016 was a cold year with less wind than in 2015,
which increased the consumption of coal for heating, and that Danish wind turbines produced
less power than in the year before. On the other hand, Danish consumption of renewable energy
increased 11% in 2017, while at the same time coal consumption fell sharply (Danish Ministry of
Energy, Utilities and Climate, 2018c).
Denmark is one of the countries with very high material flows and the material productivity would
be rated lower, if it was not due to a high production of renewable energy and efficient recycling
systems, which have a positive influence on the above-mentioned indicators. The fact that over
60% of the total land area in Denmark is under heavy agricultural production, and 16% is
designated forestry, pushes the score of eco-innovation in a negative direction (Statistics
Denmark, n.d.-a). The agricultural activities are extremely resource intensive, in particular in
terms of energy, which has a negative impact on the environmental outcome. Another important
sector is transportation of cargo, where maritime transportation also contributes a large part of
GHG emissions. Even if shipping is not included in the Paris Agreement (hence not part of the
8Danish CO2 obligations), Danish shipping industry is at the forefront of clean shipping initiatives
(Danish Shipping, 2016). Overall, Denmark has made progress, while the economic activity in
Denmark increased by more than 40% from 1990 to 2007, CO2 emissions decreased by nearly
14% - corrected for fluctuations in weather and electricity exchange with other countries (Danish
Ministry of Energy, Utilities and Climate, n.d.).
Socio-economic outcomes – worst performing indicator
This indicator aggregates statistics on employment in eco-innovation industries, the size of eco-
innovation markets, and exports of eco-innovation products are used to measure socio-economic
outcomes. The new data ranks Denmark down on 24th place (index 70, EU average 100), pulled
down by very low results in employment and turnover in eco-industries. In the best performing
indicator Exports of products from eco-industries (% of total exports), Denmark shares 3rd
position (index 0.68, EU average 0.60), with UK, behind Luxembourg (index 0.72) and Germany
(index 1.00). With 1.15% Employment in eco-industries (of total employment across all
companies), Denmark ranks 24th (index 0.15, EU average 0.37), down from 22nd in 2015, but up
from 25th in 2016. Top three countries are Romania (index 0.60), Latvia (0.62) and Poland (1.00).
According to Statistics Denmark (2017), 71.356 people were employed in environmental goods
and services in 2016. If dived by the average number of people employed (2.748.000) in 2016
(Eurostat, 2018a), the figures increases to 2.6%. Interesting observation is that the nine top
countries are from Central- and Eastern Europe (CEE), which could indicate an allocation of
products and services to these countries out of cost reasons. The only high-cost living country
above EU average is Finland on 11 th position. The same situation concerns also Turnover in eco-
industries (% of total revenue across all companies), where Denmark ranks 26th (index 0.16, EU
average 0.44), down from 23rd place in 2015. Romania (index 0.77), Bulgaria (index 0.80) and
Slovakia (index 1.00) take the top three positions, and again at top ten all positions are occupied
by CEE countries. The discrepancies in figures is related to that the NAICS codes selected for eco-
industry and circular economy does exclude a number of industries. For instance, the indicator
does not include renewable energy companies, a field that Denmark is particularly strong in,
especially in the field of manufacturing, selling, installation and service of wind turbines6. In 2016
the Danish wind turbine industry had a revenue of DKK 118.1 billion (approx. EUR 15.8 bn) and
2.2 % of employees in the Danish private sector worked in the wind turbine industry
(Vindmølleindustrien, 2017). Statistics Denmark defines green economy differently, which in turn
does not include NAICS codes that are included in the definition of eco-industries: “Environmental
goods and services are characterised as goods and services that directly protect [emphasis added]
the environment (for example wastewater treatment and remediation of contaminated soil) or
their use results in reduced environmental pressure (for example wind turbines)” (Statistics
Denmark, 2018, p. 34). In other words, economic activities that indirectly contribute to the
environment are not accounted for. In accordance to the definition of ‘Environmental goods and
services’ the turnover amounted to DKK 214 billion in 2016 of which 78% was generated in
manufacturing and utility services, 20% from other industries, including building and construction
and business services and 2% from organic products from agriculture7 (Statistics Denmark, 2018).
6
NAICS: 221115 - Wind electric power generation; and NAICS 33361 - Wind turbines (i.e., windmills), manufacturing, are not included
in the ORBIS list of eco-industries.
7 The latter two are not included at all in the definition of eco-industries.
92 | Selected circular economy and eco-
innovation areas and new trends
A positive attitude towards circular economy is spreading more and more in the Danish society.
This is manifested, for instance, through the increasing demand for organic food amongst the
Danish population, which, together with increased global market for organic food, also has led to
an increase in the number of organic farms (Det økologiske erhvervsteam, 2017). Another
example is the Advisory Board for Circular Economy Danish Government established in 2016
counting 12 CEO's and firm leaders from big as well as small Danish companies. In June 2017 the
Board delivered a report with 27 recommendations for specific efforts Denmark should focus on
in order to promote the transformation into a circular economy, which were formulated around
four general themes: 1) The circular value chain; 2) Design and production; 3) Consumption; and
4) Recycling (Advisory Board for Circular Economy, 2017).
As circular economy touches many different aspects in a value-chain, so is also the need for a wide
variety of eco-innovation and circular economy solutions. Hence, there is not a specific trend,
rather there are efforts taking place where Denmark’s sees particular societal challenges that
need to be addressed coupled with business potential. One area that stands out, is the issue how
to implement circular economy in practise. There is a demand for finding tools and methodology
to “crack the code of creating value for all stakeholders along a material stream” (Juel, 2018),
hence there is a ‘management gap’ (Trojaborg Julian, 2018). With other words it is important to
find the drivers that would attract more actors needed to get the necessary critical mass to
transition into circular economy. Some work has started and there are an increasing number of
supportive tools and organisation addressing this issue (see examples below in chapter 4).
New since the last eco-innovation report is the FORSK2025 (RESEARCH2025) catalogue that
identifies promising Danish research areas in relation to growth, employment and welfare, based
on a number of significant challenges facing society and special Danish conditions. In total 19
research topics are identified within four main areas: I) New technological opportunities; II) Green
growth; III) Better health; and IV) People and society. Green growth has seven of the research
topics: 1) Efficient, intelligent and integrated energy system; 2) Bioresources - Foods, Ingredients
and Other Biological Products; 3) Future Intelligent and Green Transport; 4) Future Buildings,
Physical Infrastructure and Cities; 5) Circular Economics and Environmental Technology; 6)
Water Resources and Technologies; and 7) Climate Change and Adaptation. (Ministry of Higher
Education and Science, 2017)
The Danish Eco-Innovation Program (MUDP) lists a number of general focus areas: Water; climate
change adaptation; circular economy and recycling of waste; cleaner air; less noise; fewer
hazardous chemicals; the industry's environmental performance; and ecological and sustainable
construction (Danish EPA, n.d.). According to the latest action plan for 2018, MUDP should
promote sustainability and resource efficiency, promote the development and demonstration of
sustainable technological solutions that ensure efficient resource utilization and address nature
and environmental challenges in Denmark and globally. The Board states that it looks for new
innovative solutions in:
• Circular economy, including solutions that promote repair, recycling and circular design.
10• Air: e.g. in marine transport, particulate pollution from heating of homes, and NOx and
particulate pollutants from urban transport.
• Water; for example, where provisions and industry are faced with efficiency requirements.
• Climate adaptation; floods and overflows prevention.
• Plastic: where possible to support the new National Action Plan against Plastic Pollution and
the EU's Plastic Strategy, including promoting the development and demonstration of micro-
plastic cleaning technologies and projects that prevent pollution from plastic products.
(Danish EPA, 2017d)
One particular issue for Denmark is waste and resource management. Denmark only have a few
sorting facilities that can handle mixed plastic fractions (RenoNord, n.d.), which is currently
exported for sorting or a large part goes disproportionately to incineration (European
Commission, 2016). Although there are plans for new facilities (DAKOFA, 2017a). Another large
waste stream comes from construction industry, which is estimated contributing 30% of the total
waste volume. While Danish construction industry has a high recycling rate, construction waste is
often processed into material of lower value (Danish EPA, 2017e). The waste reduction strategy
“Danmark uden affald II - Strategi for affaldsforebyggelse” (April 2015) set the objective to avoid
and minimize waste among Danish companies and consumers, based on two cross-cutting
themes: resource efficient businesses and green consumption, in five areas: Food waste; Building
and Construction; Clothing and textiles; Electronics and Packaging (Ministry of Environment and
Food of Denmark, n.d.b). The strategy has been evaluated and the main outcome was that it has
increased knowledge of waste and recycling among municipalities and citizens and companies
but very few of the 12 expected effects were achieved (Ramboll, 2017). A new national waste
plan is in the pipeline and is expected to be reviled in 2020 (Danish EPA, 2018a). Several working
groups under the Nordic Council of Ministers 8 have published a number of reports concerning,
textiles reuse and recycling (including a certification system), on circular economy in the Nordic
construction sector, and end-of-waste criteria for construction & demolition waste
(www.norden.org). The Ellen MacArthur Foundation report (2015) on circular economy
highlighted following potential sectors9 in Denmark: Food and Beverage; Construction and Real
estate; Machinery; Plastic Packaging and Hospitals. One issue in recycling concerns imported
goods, as there is no information what type of materials a product is made of, here development
and wider use of a ‘material passport’ could be an idea. As Denmark has a large agriculture sector
with a significant environmental impact, there is scope to further develop for more efficient food
production in a sustainable way. For instance, the Danish International Centre for Research in
Organic Food Systems (ICROFS) announced new funding for projects that provide concrete,
practical ecological solutions in relation to climate and environment or animal health and welfare
(ICROFS, 2018). Energy is an important area, especially with a long-term goal of becoming a low-
emission society based on renewable energy in 2050 and there is still much to do even if trends
are positive. In 2017 the Danish Energy Commission presented their recommendations, including
a paradigm shift in energy policy, that includes a cost-effective combination of energy-efficiency
improvements, renewable energy deployment and electrification of the energy system.
8
Nordic co-operation is one of the world’s most extensive forms of regional collaboration, involving Denmark, Finland, Iceland,
Norway, Sweden, and the Faroe Islands, Greenland, and Åland.
9 Based on five selected sectors, covering 25% of the Danish economy.
1160 council flats to be built in Lisbjerg near Aarhus, Denmark, according to circular economy
principles. Once the flats are no longer fit for living anymore, 90 percent of the building
materials can be recycled without losing value, e.g. a window from the building can be used as
a window in another house. The project, known as Circle House, has received nearly EUR
940.000 in funding from MUDP. Today the construction industry accounts for an estimated 30%
of the total amount of waste produced in Denmark. While the Danish construction industry has
a high rate of recycling, the waste often is recycled into materials of low quality.
Key words: recycling, reuse, construction, resource efficiency
Internet links: Danish Environmental Protection Agency (Danish):
http://mst.dk/service/nyheder/nyhedsarkiv/2017/nov/nyt-projekt-skaber-60-nye-huse-med-
materialer-som-kan-genbruges-i-fremtiden/
State of Green (English):
https://stateofgreen.com/en/profiles/state-of-green/news/60-homes-built-from-reusable-
materials#/.Wh5a4PZoSFE.linkedin
Contact: Miljøstyrelsen (EPA), Haraldsgade 53, 2100 København Ø, Tlf. +45 72 54 40 00,
mst@mst.dk
3R Kontor I have been specializing in the
reuse of used office furniture in a
sustainable manner since 2015. The
business concept is based on circular
economic thinking, which means that
they treat everything as a resource.
Activities include environmentally-friendly purchase and selling of used furniture, donation and
social hiring. 3R Kontor shows that a viable business is possible by including environmental
considerations and social responsibility, and that they even can positively influence each other.
3R Office is owned by Holmris.Designbrokers, Denmark's largest retailer of commercial
furniture.
Key words: recycling, reuse, office furniture, social responsibility
Internet link: www.3xr.dk
Contact: Mr. Steffen Høgh (Director, partner), 3R Kontor ApSEngelsholmvej 238940 Randers
SV, Tlf. +45 70 70 79 70
12Re-Match Stadiums and sports arenas throughout the world
are increasingly using artificial turf and after it is worn-out,
8-10 years, a large amount of artificial turf is sent to landfill.
As the first and only in the world, Re-Match has the
technology to separate 99% of worn-out artificial turf into
raw components, which then can be recycled and manufactured into new artificial turf.
Re-Match also offers cut & roll and handling, including transport of the old turf and sale of the
finished clean products to be used in other products. Re-Match has all required permits,
notifications, and authorisations in place, including permits for transportation of used turf
across borders, making disposal of artificial turf very easy for owners of the used turf.
Re-Match has obtained the ETV Certification.
Key words: recycling, artificial turf
Internet link: http://re-match.dk
Contact: Re-Match A/S, HI-Park 415, 7400 Herning, Tel.: +45 77 34 67 34, info@re-match.dk
LEGO® plans to launch the first sustainable
Lego bricks in 2018. The new sustainable
LEGO elements are made from plant-based
polyethylene made from ethanol produced
from sugarcane. The sugarcane used in the
production is sourced sustainably in
accordance with guidance from the
Bioplastic Feedstock Alliance (BFA) and is
certified following global standards for
responsibly sourced sugarcane.
Picture taken from www.lego.com
The plant-based plastic is technically identical to those produced using conventional
plastic. The first bricks to be produced of the new material are, suitably, botanical elements
such as leaves, bushes and trees.
Key words: LEGO, plant-based plastic bricks
Internet link: https://www.lego.com/en-us/aboutus/news-room/2018/march/pfp
Contact: Bogdan.Gherasim@LEGO.com
133 | Barriers and drivers to circular economy
and eco-innovation in Denmark
The single most important driver in Denmark is the increasing positive attitude towards circular
economy. In general there is a big movement in society towards circular economy, local and
regional governments have or are developing circular economy strategies, more and more Danish
enterprises see the value of and opportunities in the circular economy model as way to increase
their competitiveness, as well as the Danish population who is becoming more aware of their role
as consumers, as the results from a web survey showed in 2017 (Danish EPA, 2017b). According
to another survey on circular economy amongst Danish companies (Danish EPA, 2017a), 88% had
a positive view of circular economy. On question what they will gain by applying circular
economy, 42% of companies believe that they can generally reduce environmental impact by
using circular economy and 40% believe that the use of circular economy generally prepares them
better for the future. On the other hand, lack of knowledge about circular economy is perceived
as the primary barrier to use circular economics as a business model, while (lack of) time was the
second most important issue (probably most common amongst SMEs). Important is that 30% find
that advice and consulting services are crucial for their business to get started or increase the use
of circular economy model. As mentioned previously, such steps have been taken in terms of
providing supportive tools. The MATChE (www.matche.dk) programme provides: knowledge on
implementing circular economy (with focus on the manufacturing industry), assessment screening
how ready (manufacturing) companies are in the transition to circular economy and helps to
develop customised transition routes to circular economy. Another new support action is the
portal CirkulærVirksomhed.dk (CircularBusiness.dk) which provides SMEs with more knowledge
about circular economy.
The general economic outlook for Denmark is good. Danish economy enjoying a solid growth of
around 2% (2016-2017), where real GDP growth is driven by net exports, private consumption
and investment. Employment levels and disposable income growth have been steady, although
private consumption went slightly down. On the other hand, Denmark has seen relatively strong
increases in food prices and services as well as a continuing increase in energy prices. (European
Commission, n.d.a) This could impact purchase of organic food for the more price sensitive
consumers as it is often prices higher than non-organic food. Rising house prices, residential
investment is forecasted to remain an important driver of investment growth in the near future.
With other words, existing buildings and new constructions should be seen as potential driver
for eco-innovation and circular economy with energy-efficiency in mind, best supported by
legislative and fiscal measures.
The positive economic picture also confirmed by an investment survey conducted by the
European Investment Bank (EIB) (2017)where the results was that Denmark has the highest share
of top performing companies in terms of investment in the EU (European Investment Bank,
2018). Danish firms are generally positive about the economic outlook (similar to the rest of the
EU), business prospects and availability of finance, whereas more firms, especially in the
manufacturing sector, expect the political and regulatory climate to deteriorate than improve in
the next 12 months (no specific reason is given). SMEs are among the most optimistic about the
business prospects of their sector, which is positive as many eco-innovations take place in start-
14ups. On a note, on average, just over one third of firms’ building stock in Denmark is perceived
to satisfy high energy efficiency standards (36%) (EU average of 39%). This is well in line with
recommendations of the Energy Commission of the need to focus on energy-efficiency
improvements and should be seen as a potential driver. On the other hand, 81% of Danish
companies consider availability of skilled workers as an obstacle to their investment, especially
construction and manufacturing sector. This could be even more critical when implementing
energy efficiency technology in existing building and new constructions, as they require more
specialised training, hence a potential barrier. 72% (same as EU average) also state that skilled
staff availability issue is perceived as a long-term barrier to investment. Although, with its
medium-term plan Growth and Prosperity 2025, the government has set out a reform programme
for that includes initiatives to boost labour supply. One issue is the possibility for foreigners to
acquire residence status in Denmark, while there have been efforts to attracts highly skilled
researchers (The Copenhagen Post, 2013; Danish Customs and Tax Administration, 2015), rules
were changed in 2016 which made the permanent residency rules stricter, which could make it
hard to attract highly-skilled workers. On the same time, the ‘Start-up Denmark’ programme, a
(foreign) start-up founder will get a 2-year resident and work permanent with an additional 3-
year extension if the business is on track (Danish Business Authority, n.d.).
A strong driver is Danish exports has been green energy technology and services, based on good
international reputation in the field, with a strong support framework of export financing and
assistance for internationalisation of innovation and commercial activities, both at home and
abroad. Exporting Danish green technology and services is not only a way to make business but
also part of the Danish Governments’ stand to combat climate change by diffusing green
technology and know-how. In 2016 Danish companies exported energy technology for DKK 75.6
bn and services for DKK 8.2 bn (Danish Ministry of Energy, Utilities and Climate, 2017a). Exports
of green and other energy technologies rose until 2014 (Danish Ministry of Energy, Utilities and
Climate, 2015), which saw the highest level (DKK 78.4 bn) but decreased in 2015 (DKK 76.7bn) and
2016. The main reason is the decline of 2.4% (from DKK 34.0 bn to DKK 33.2 bn) in exports of
green energy technology while energy services saw an slight increase. In 2016, the share of green
energy technology of total goods exported was 6.7% compared to exports of all energy technology
which was 11.8% of total Danish export, higher than from any other country in the EU. Although,
the industry, especially wind energy industry, faces stiff competition and only stays ahead thanks
to technological development and an export strategy. Also, water technology is doing well, with
a value of DKK 19.8 billion exported in 2016, an increase with 0.5% compared to 2015 (Danish
EPA, 2017c). The Danish export of clean air technologies was DKK 7,2 billion in 2017. The two
sectors goal, is to double the Danish export before 2030.
A driver is that Danish exports could be increased by offering complete (green) energy solutions
as Denmark gains increased experience in the implementation, transition and use of green energy
technology and solutions. Example of this is the wind turbine-coupled hybrid demonstrator that
has been installed by Vestas in Spain to balance energy supply with grid demand (Vestas, 2018).
However, despite increased competition the transition to renewable energy systems and
increasing global demand for green technologies for which positions Danish companies well in
the fields of energy, climate and environmental technology, hence a good driver. Nonetheless, to
stay competitive, there is a need to invest more in research and innovation (R&I).
The Global Cleantech Innovation Index (GCII) programme provides an insight into Danish clean
tech innovation pros and cons as it “investigates where, relative to GDP, entrepreneurial clean
15technology companies are most likely to emerge from over the next 10 years – and why”
(Cleantech Group, 2017). In the latest edition from 2017, Denmark ranks 1st (followed by, Finland
and Sweden), up from 5th position in 2014, based on strong scores in both inputs and outputs of
innovation (Cleantech Group, 2017). The reason is that Denmark performs strongly in key
contributing cleantech specific drivers, which include the amount of capital raised by cleantech
funds and the number of cleantech organizations. Although the report warns that the recent cut
in public cleantech R&D budget, which is not accounted for in the 2017 Index, will most likely
have a negative effect in the future (according to the eco-innovation index ‘Governments
environmental and energy R&D appropriations and outlays’ this has already taken place as
Denmark is positioned below EU average for the for first time). Denmark is seen as a “relatively
inefficient innovator” (Cleantech Group, 2017) mainly due to low performance in emerging
cleantech innovation, while ranking high on patent levels, it is pulled down by the low amount of
venture capital investment. Commercialised cleantech is Denmark's strong point, where the
country is far ahead of the other countries, with the country scoring top marks for cleantech
exports, the number of public cleantech companies and the number of renewable energy jobs.
OECD ‘Green Growth Indicators 2017’ also ranks Denmark as a leader in environmental
technology and innovation and that environmental related technologies reaches 22% share of all
inventions (OECD, 2017).
On a political level Danish municipalities and regions are playing a key role and are heavily
involved in the transition to circular economy. This is of course being a driver as they are well
positioned in society in developing public-private relations and have established connections to
stakeholders, i.e. they have the experience to develop public-private partnerships, system
building and are part of value-chains, all factors necessary in a circular economy. In general, one
can say that these relations themselves are drivers as there is a history and willingness to
cooperate across sectors in Danish society. Municipalities and regions are also well positioned as
many of the areas that concern eco-innovation and circular economy are under their
responsibility. For instance, Danish local authorities are responsible for waste disposal and are in
have a strong position on the market through public procurement, hence they can disrupt the
market by demanding green products or products produced according to circular economy
principles. On the other hand, a barrier is that there is no extra budget or finance from the
national government to execute activities related to circular economy, which means that
municipalities and regions have to plan for activities and project related to circular economy
within their given budget. In contrast, to improve the utilization of Denmark’s sustainable energy
production, the Danish Government has agreed to spend DKK 130 million (EUR 17.50 million) on
large-scale energy storage projects (Copenhagen Capacity, 2018). This could become a barrier if
the governments sends an unclear message how much available funding there is for eco-
innovation, considering that they recently cut the public cleantech R&D budget.
In terms of legal framework, a new national waste plan is in the pipeline and is expected to be
presented in 2020 (Danish EPA, 2018a). A new regulation on environment, agriculture, water and
biodiversity is being introduced, while new strategies and policy agreements are planned to be
revealed in 2018 on climate, energy, transport and agriculture (Mortensen, 2018). Several groups
have provided recommendations to the Danish Government related to circular economy and
transition to a green society, from:
• the Advisory Board for Circular Economy, with 27 points of recommendation.
16• the Energy Commission which recommends a paradigm shift in energy policy.
• the Chairmen of the Danish Economic Council of Environmental Economics regarding
contains three chapters that focus on Danish climate policy.
It needs to be seen how much of these recommendations the Danish Government will take into
consideration and produce any action plans accordingly. There are also a number of industry and
sectoral associations that also have their own recommendations, e.g. Dansk Energi (Danish Energy
- www.danskenergi.dk), Dansk Industri – DI (the Confederation of Danish Industry -
www.danskindustri.dk) and the Danish Waste Association (www.danskaffaldsforening.dk).
A driver is the willingness to learn by evaluating the different governmental programs as in the
case of the Danish resource strategy (Ramboll, 2017) and of MUDP financed projects (DAMVAD
Analytics, NIRAS, 2017). For the MUDP evaluation, one of the conclusions was, and can be seen
as a barrier, that there are a number of solutions and products that have not been further
developed after the project period and, for now, will not have a concrete business or
environmental impact. However, some project partners have expressed interest to revisit some
of the projects.
A driver is also the participation of Denmark in the Nordic Council of Ministers, where
cooperation on Nordic bio economy and green growth is taking place10. Activities extends from
publication to development of a proposals for a Nordic strategy for the bio economy. Important
is the learning from good examples in the different countries, like the ‘Green Growth in Nordic
Regions’ project that highlight key characteristics of 50 Nordic green growth cases (Nordregio,
n.d.b) and serve as a source of inspiration for practitioners and policy-makers (Nordregio, 2016).
While productivity in the Danish economy remains among the highest in the EU, productivity
growth, due to the service sector, has been falling since the second half of the 1990s, although
this has been similar in other EU member states (European Commission, 2018a; OECD, 2016b).
One issues is that the economy is not as well connected to global value chains as similar smaller
open economies, and despite relatively high level of investment in knowledge-based capital it
does not bring expected outcomes (OECD, 2016b). Limited competition in several domestically
oriented services sectors has been identified as the reason. While some measures have been
taken by the Danish Government, to strengthen competition and productivity, e.g. through
simplification of rules and regulations, there is still room for improvement in some areas according
to the Danish Productivity Board (European Commission, 2018a). Better procurement processes
in the public sector is another issue. For instance, the use of performance models in procurement
for hospitals in circular economy opportunity identified as a solution in the Ellen MacArthur
Foundation repot (2015). The Ellen MacArthur Foundation (2015) also lists insufficient
competition as a barrier to circular economy. It also states that policy interventions at EU-level
is needed to complement national Danish policies in this issue as the value chains of many sectors
extend across borders. For instance, product policy and promoting the market for secondary raw
materials are areas that could be coordinated at European level in order to simplify and reduce
the cost of conducting (circular) business.
10 http://www.norden.org/en/theme/nordic-bioeconomy
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