NEWS: Denmark boosts hydrogen pipeline to Germany with 5.6bn kroner

A cross-party deal announced on 29 September adds 5.6bn kroner in state support to DHB1, the hydrogen pipeline from Esbjerg to Frøslev on the German border. It also allows a single project to anchor the pipeline with binding contracts for 0.1GW. The changes help unlock around 11.8bn kroner in German and EU support, including for two projects at Kassø in Aabenraa, which stand to gain a direct link to German buyers when the pipeline opens at the end of 2030.

Denmark will add 5.6bn kroner (€750m) in state support to the planned hydrogen pipeline to Germany and ease terms for producers, under a cross-party agreement announced on 29 September. The changes give the project and its future users a firmer footing as the hydrogen market matures.

The pipeline, known in the industry as DHB1, forms the southern section of the Danish Hydrogen Backbone. The roughly 133km line will run from Esbjerg through Veerst, between Vejen and Egtved, before crossing the German border at Frøslev. Built by state-owned grid operator Energinet, it will give Danish producers direct access to industrial customers in Germany. It is scheduled to start operating by the end of 2030, on an ambitious timetable.

The government and four opposition parties (Venstre, the Conservatives, the Red-Green Alliance and the Alternative) agreed that the state will take on a larger share of the financial risk. According to the climate, energy and utilities ministry, "if at least one project wants to use the pipe, it will be built".
State operating support will rise from 10.9bn to 16.5bn kroner (€2.2bn) at 2027 prices, around 187m kroner a year between 2030 and 2059, to keep tariffs competitive for producers.

The agreement also updates the booking requirement, one of the main issues raised by producers. Under the February 2025 deal, companies collectively had to pre-book at least 0.5GW of capacity, a level that required several projects to commit together. The 0.5GW threshold remains for Energinet's capacity sale before 1 December, while binding contracts will now be required for 0.1GW, allowing a single project to anchor the pipeline.

Producers now have until 1 January 2028 to provide financial guarantees. In the meantime, the state will underwrite up to 2.1bn kroner of Energinet's costs, up from 417.4m kroner, allowing development to continue until producers commit. The ministry said this gives producers much greater certainty about the pipeline and what it will cost to use.

"With this agreement, we can open a new export market for Denmark and contribute to an energy-independent Europe. I am pleased that a broad circle of parties is taking responsibility and will help to raise the possibility of a Danish hydrogen adventure," said climate, energy and utilities minister Samira Nawa.

The projects expected to use the pipeline already have substantial backing. Five Danish hydrogen projects have been promised around 11.8bn kroner (€1.6bn) from the European Hydrogen Bank and the German state. That includes €1.3bn from a German auction reserved for projects connected to the pipeline, with European Energy, Copenhagen Infrastructure Partners and Everfuel among the recipients. The later guarantee deadline gives producers more time to arrange their financing, which the ministry says will allow this German and EU funding to come into play.

Mette Kirstine Schmidt, acting director of Hydrogen Denmark, said the agreement made construction significantly more likely. "The opportunities for Denmark are enormous," she said, calling on German buyers and Danish producers to turn ambitions into action through long-term contracts.

The extra support will come from central reserves in the 2027 budget bill and future fiscal headroom. If at least 1GW is booked throughout 2030–59, the agreement estimates that the pipeline could operate free of state support, which would also lower tariffs for producers.

Construction will include social clauses on pay and working conditions. Trade unions will be able to access building sites by arrangement with Energinet, a provision the Red-Green Alliance says it secured.

The agreement is particularly significant for Aabenraa. The pipeline leaves Denmark at Frøslev, and two of the five projects awarded German and EU support are at Kassø. European Energy, which already runs the Kassø PtX plant, was awarded up to €228m in the German auction to add 150MW of hydrogen capacity there.

Hy2gen Nordic's Albatros project, a proposed 100MW electrolyser backed by the European Hydrogen Bank, is designed to feed around 14,400 tonnes of renewable hydrogen a year into the backbone from 2031. With the pipeline now more likely to go ahead, Kassø stands to gain a direct link to industrial buyers in Germany, placing Aabenraa at the heart of an emerging Danish-German hydrogen corridor.