Biofuels Producation and Development in Denmark

October 28, 2025

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by Sune Tjalfe Thomsen (University of Copenhagen/IEA Bioenergy Task 39 Biofuel News) • Renewable energy covers nearly half of Denmark’s gross energy use, with biomass still the largest contributor.

• Biogas production has tripled since 2016 and now supplies almost 50% of national gas demand.

• Biodiesel production remains steady at about 200,000 tonnes per year, while bioethanol output is modest and concentrated at one facility.

• Road transport is still dominated by fossil fuels, though new registrations show a rapid shift to electric vehicles.

• Denmark is investing €1.35 billion in biochar, with the first full-scale pyrolysis plant inaugurated in 2024.

OVERVIEW

Denmark has undergone a remarkable transformation of its energy system over the past three decades. As shown in Figure 1, the share of renewable energy in gross energy consumption has steadily increased from less than 10% in the mid-1990s to nearly 50% today. This transition has been driven by strong national climate policies, investment in wind power, and an increasing focus on biomass. Looking ahead, Denmark’s ambition to achieve a 70% reduction in greenhouse gas emissions by 2030 and climate neutrality by 2050 will require not only continued electrification but also a growing role for sustainable biofuels, particularly in sectors such as aviation, shipping, and heavy transport where direct electrification remains challenging. Figure 1. Renewable energy's share of total gross energy consumption. (StatBank Denmark).

PRODUCTION AND CONSUMPTION

Biomass availability

Straw remains a cornerstone biomass resource in Denmark, but both production levels and utilization patterns reveal important dynamics. Figure 2 illustrates that while annual straw production fluctuates considerably, the amounts delivered to markets – whether for energy or for feed and bedding – have remained relatively stable. This reflects the widespread use of long-term contracts, particularly between farmers and district heating or combined heat and power plants, which buffer market deliveries from annual yield variations. Consequently, most of the year-to-year variation in straw use is allocated to the share left on the fields. Figure 2. Straw yield and use. (StatBank Denmark)

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BIOFUELS PRODUCTION

Biogas has rapidly become one of the most significant renewable energy carriers in Denmark. According to Biogas Denmark’s 2025 Outlook, biogas now covers almost half of Denmark’s gas demand. Importantly, most of this production is upgraded to natural gas grid quality, ensuring full compatibility with the existing gas infrastructure. This means biogas is not only displacing fossil natural gas in heating and power generation but is also increasingly available for use in the transport sector and other advanced applications.

Figure 4 illustrates the significant growth in Danish biogas production, particularly after 2015. Output has surged from a relatively modest base to more than 1.4 billion cubic metres per year, making biogas one of Denmark’s fastest-growing renewable energy sources.

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Bioethanol production in Denmark is governed by a single producer – Meliora Bio, a 2G biorefinery. The facility has been developed from the former Inbicon demonstration plant and was officially re-commissioned in 2023 after a period of dormancy.

Under new ownership, it has been modernized to deliver straw based bioethanol alongside valuable co-products such as lignin and prebiotic fibers. With an annual production of around 5,000 tonnes of bioethanol, the scale is modest, but Meliora Bio stands out as a flagship demonstration of advanced biofuels in practice, offering critical technological and operational experience that may support future upscaling.

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Biodiesel production remains modest but consistent in Denmark, anchored around two established producers. The largest facility is Emmelev A/S, which manufactures biodiesel from domestically grown rapeseed. Emmelev reports annual capacity of around 160,000 tonnes of biodiesel.

The second major producer is Daka ecoMotion, which specializes in second-generation biodiesel derived from animal by-products not suitable for feed or food applications. Annual production approximates to 40-50,000 tonnes. This plant provides a circular pathway for animal residues while contributing to greenhouse gas reductions through advanced feedstock use.

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Road transport

Denmark’s road transport sector remains highly dependent on liquid fossil fuels, despite recent shifts in the vehicle fleet. As shown in Figure 7, gasoline and diesel still dominate the current stock of passenger cars, vans, and lorries.

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A clear transition is visible in new vehicle registrations. For passenger cars (Figure 9), fully electric models are rapidly gaining ground, while plug-in hybrids are losing share. Vans show a similar trend (Figure 10), with electric registrations increasing and diesel declining. For lorries (Figure 11), electrification is only beginning, with diesel still dominant.

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Aviation and marine

Denmark’s aviation and marine sectors remain strongly tied to fossil fuels, but with very different dynamics. As shown in Figure 12, fuel oil use in shipping dominates, reaching more than 14 million tonnes annually when including fuel bunkered abroad. This is a critical point: Danish ships bunker enormous amounts of fuel outside Denmark, which means a large share of their actual energy use is not reflected in the national energy accounts. Aviation fuel consumption is much smaller and relatively stable, though it too is included in international reporting when bunkered abroad.

The maritime sector is under increasing regulatory pressure to decarbonize, not least through EU low-carbon fuel blending mandates and greenhouse gas intensity reduction requirements.

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Policies

Denmark operates under the EU Renewable Energy Directive (RED II) and Fuel Quality Directive, which set binding targets and enforce strict sustainability criteria for biofuels across member states.

Key components include:

• Lifecycle greenhouse gas (GHG) reduction requirements for biofuels – increasing minimum GHG savings (≥60– 70% for new installations, depending on pathway and start date).

• Caps on crop-based biofuels to prevent negative impacts from indirect landuse changes (ILUC).

• Recognition and encouragement of advanced biofuels and sustainable biomass by allowing double counting for selected residues.

National legislation includes:

• Denmark’s Act on Sustainable Biofuels and on the Reduction of Greenhouse Gases from Transport, first introduced in 2020 and updated in 2024, mandates a 7.6% overall biofuel blending quota in gasoline and diesel. The Act also requires a minimum share of advanced biofuels: initially 0.3% in 2021, increasing to 0.9% from 2022 onward.

• In December 2024, the European Commission approved a €1.7 billion (DKK 13 billion) Danish state aid scheme to support renewable gas production (upgraded biogas and e-methane) for grid injection. The scheme involves 20-year price premiums awarded through competitive auctions and is projected to yield 7.9 PJ of renewable gas annually, with an expected GHG emissions reduction of ~450,000 t CO₂/year from 2033 onward.

Status of pyrolysis in Denmark – big potential, but not primarily for fuel

This section draws on conversations with Danish stakeholders, including Tobias Pape Thomsen (Roskilde University) and Morten Heick (Pyrolyse Danmark / Stiesdal SkyClean A/S). Denmark is positioning pyrolysis – the thermal decomposition of biomass in an oxygen-free environment producing biochar – as one of the most important climate measures to reduce agricultural emissions.

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The largest plant: Stiesdal SkyClean in Vrå

In October 2024, Stiesdal SkyClean inaugurated Denmark’s largest full-scale pyrolysis facility in Vrå. With a 20 MW capacity, the plant processes biogas fibers – as an add-on to an existing biogas plant – through slow pyrolysis and is expected to reduce emissions by ~42,000 tonnes of CO₂ annually. This is making it one of the most significant climate projects in Danish agriculture.

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Technology maturity and efficiency

Globally, biochar has become the leading certified carbon removal option, accounting for the majority of durable credits issued in 2023. Pyrolysis itself is a mature technology with relatively low internal energy needs on dry feedstocks, but wet residues require substantial drying energy. As a result, pyrolysis gas or oil is not yet marketed in Denmark, since most of the energy is recycled internally.

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Other Danish developers are pursuing flash-pyrolysis technologies, including plants based on biogas residues and dried poultry manure. READ MORE

Tags

Transportation Fuels Policy synthetic methane/e-methane Sustainability straw shipping Renewable Energy Directive (RED/RED II/RED III) methane/biomethane markets/sales market forces Marine/Maritime Bio and Renewable/Sustainable Fuel (SMF) lignin life cycle analysis (LCA) ILUC (Indirect/Induced Land Use Change) heating oil/fuel GHG (Greenhouse Gas Emissions) Intensity fiber European Union (EU) ethanol/bioethanol environmental policy energy policy electricity/power generation Denmark co-products Canola/Rapeseed biomass Biogas biodiesel biochar bio-oil/pyrolysis oil animal fat pyrolysis carbon recycling carbon credit poultry litter/waste manure

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