Denmark has large proven reserves of oil and natural gas in the North Sea with Esbjerg being the main city for the oil and gas industry. Denmark is the largest producer of oil and natural gas in the EU. Production has decreased in recent years, though. Whereas in 2006 output (measured as gross value added or GVA) in mining and quarrying industries made up more than 4% of Denmark’s total GVA, in 2017 it amounted to 1.2%. The sector is very capital-intensive, so the share of employment is much lower: About 2,000 persons worked in the oil and gas extraction sector in 2016, and another 1,000 persons in extraction of gravel and stone, or in total about 0.1% of total employment in Denmark.
Engineering and high-tech
Denmark houses a number of significant engineering and high-technology firms, within the sectors of industrial equipment, aerospace, robotics, pharmaceutical and electronics.
Electronics and industrial equipment
Danfoss, headquartered in Nordborg, designs and manufactures industrial electronics, heating and cooling equipment, as well as drivetrains and power solutions.
Denmark is also a large exporter of pumps, with the company Grundfos holding 50% of the market share, manufacturing circulation pumps.
Manufacturing
In 2017 total output (gross value added) in manufacturing industries amounted to 14.4% of total output in Denmark. 325,000 people or a little less than 12% of all employed persons worked in manufacturing (including utilities, mining and quarrying) in 2016. Main sub-industries are manufacture of pharmaceuticals, machinery, and food products.
Service industry
In 2017 total output (gross value added) in service industries amounted to 75.2% of total output in Denmark, and 79.9% of all employed people worked here (in 2016). Apart from public administration, education and health services, main service sub-industries were trade and transport services, and business services.
Transport
Copenhagen Central Station with S-Trains.
Significant investment has been made in building road and rail links between Copenhagen and Malmö, Sweden (the Øresund Bridge), and between Zealand and Funen (the Great Belt Fixed Link). The Copenhagen Malmö Port was also formed between the two cities as the common port for the cities of both nations.
The main railway operator is Danske Statsbaner (Danish State Railways) for passenger services and DB Schenker Rail for freight trains. The railway tracks are maintained by Banedanmark. Copenhagen has a small Metro system, the Copenhagen Metro and the greater Copenhagen area has an extensive electrified suburban railway network, the S-train.
Private vehicles are increasingly used as a means of transport. New cars are taxed by means of a registration tax (85% to 150%) and VAT (25%). The motorway network now covers 1,300 km.
Denmark is in a strong position in terms of integrating fluctuating and unpredictable energy sources such as wind power in the grid. It is this knowledge that Denmark now aims to exploit in the transport sector by focusing on intelligent battery systems (V2G) and plug-in vehicles.
Energy
Denmark has invested heavily in windfarms. In 2015, 42% of the domestic electricity consumption comes from wind.
Fossil fuel consumption in Denmark.
Denmark has changed its energy consumption from 99% fossil fuels (92% oil (all imported) and 7% coal) and 1% biofuels in 1972 to 73% fossil fuels (37% oil (all domestic), 18% coal and 18% natural gas (all domestic)) and 27% renewables (largely biofuels) in 2015. The goal is a full independence of fossil fuels by 2050. This drastic change was initially inspired largely by the discovery of Danish oil and gas reserves in the North Sea in 1972 and the 1973 oil crisis. The course took a giant leap forward in 1984, when the Danish North Sea oil and gas fields, developed by native industry in close cooperation with the state, started major productions. In 1997, Denmark became self-sufficient with energy and the overall CO2 emission from the energy sector began to fall by 1996. Wind energy contribution to the total energy consumption has risen from 1% in 1997 to 5% in 2015.
Since 2000, Denmark has increased gross domestic product (GDP) and at the same time decreased energy consumption. Since 1972, the overall energy consumption has dropped by 6%, even though the GDP has doubled in the same period. Denmark had the 6th best energy security in the world in 2014. Denmark has had relatively high energy taxation to encourage careful use of energy since the oil crises in the 1970s, and Danish industry has adapted to this and gained a competitive edge. The so-called “green taxes” have been broadly criticised partly for being higher than in other countries, but also for being more of a tool for gathering government revenue than a method of promoting “greener” behaviour.
| Oil | Gasoline | Natural gas | Coal | Electricity | |
|---|---|---|---|---|---|
| Excise&VAT | 9.3 | 7.3 | 3.3 | 2.5 | 11.7 |
Denmark has low electricity costs (including costs for cleaner energy) in EU, but general taxes (11.7 billion DKK in 2015) make the electricity price for households the highest in Europe. As of 2015, Denmark has no environment tax on electricity.
Denmark is a long time leader in wind energy and a prominent exporter of Vestas and Siemens wind turbines, and as of May 2011 Denmark derives 3.1% of its gross domestic product from renewable (clean) energy technology and energy efficiency, or around €6.5 billion ($9.4 billion). It has integrated fluctuating and less predictable energy sources such as wind power into the grid. Wind produced the equivalent of 43% of Denmark’s total electricity consumption in 2017. The share of total energy production is smaller: In 2015, wind accounted for 5% of total Danish energy production.
Energinet.dk is the Danish national transmission system operator for electricity and natural gas. The electricity grids of western Denmark and eastern Denmark were not connected until 2010 when the 600MW Great Belt Power Link went into operation.
Cogeneration plants are the norm in Denmark, usually with district heating which serves 1.7 million households.
Waste-to-energy incinerators produce mostly heating and hot water. Vestforbrænding in Glostrup Municipality operates Denmark’s largest incinerator, a cogeneration plant which supplies electricity to 80,000 households and heating equivalent to the consumption in 63,000 households (2016). Amager Bakke is an example of a new incinerator.
Greenland and the Faroe Islands
Main articles: Economy of Greenland and Economy of the Faroe Islands
In addition to Denmark proper, the Kingdom of Denmark comprises two autonomous constituent countries in the North Atlantic Ocean: Greenland and the Faroe Islands. Both use the Danish krone as their currency, but form separate economies, having separate national accounts etc. Both countries receive an annual fiscal subsidy from Denmark which amounts to about 25% of Greenland’s GDP and 11% of Faroese GDP. For both countries, fishing industry is a major economic activity.
Neither Greenland nor the Faroe Islands are members of the European Union. Greenland left the European Economic Community in 1986, and the Faroe Islands declined membership in 1973, when Denmark joined.
Danish International Development Agency (DANIDA) is the brand used by the Ministry of Foreign Affairs of Denmark when it provides humanitarian aid and development assistance to other countries, with focus on developing countries. There is no distinct Danida organisation within the Ministry.
Origin of name
The organisation’s name was originally DANAID. In Greek mythology, the Danaids were daughters of Danaus who killed their husbands and were condemned to fill a bathtub with water to wash away their sins. Because the buckets they were given to do this were actually sieves, they worked for all eternity in Tartarus without making any progress. For this reason, the aid agency’s name was changed from DANAID to DANIDA at the last minute when this unfortunate connotation was discovered. The term Danida appeared in 1963.
Overview
Denmark has been granting development assistance since the end of the Second World War. It is one of the five countries in the world that meets the United Nations’ target of granting 0.7% of gross national income (GNI) in development assistance. In 2011 Denmark disbursed roughly DKK:15.753 billion (US$2.98 billion) in development assistance to countries in Africa, Asia, Latin America, the Middle East, and Denmark’s European Union neighbors. Furthermore, DANIDA works in collaboration with many Danish NGOs such as Global Medical Aid. According to the OECD, 2020 official development assistance from Denmark increased 0.5% to USD 2.6 billion.