Danish bioethanol project halted due to lack of political support and financing issues

Plans to build Denmark’s first biorefinery near Holstebro, which was due to produce bioethanol and biogas, have come to a halt as a result of lack of political support and financing issues.

The parties behind the Maabjerg Energy Center project have now decided not to go ahead with the biorefinery, which was intended to generate green power, heating, biogas and second-generation bioethanol based on by-products from local agriculture.

"It's a great shame that we're now forced to make the tough decision to drop the project,” said Jørgen Udby, chairman of the board for Maabjerg Energy Center.

He added: “We have an extremely well-designed project, which has been scrutinised from all angles over five years. Now other countries will be driving the development and creating jobs, while Denmark might be importing bioethanol.”

In summer 2014, Maabjerg Energy Center was awarded DKK 293 million (€39.37m) in EU funding, and in May, the Danish Government presented plans for a mixture requirement for second-generation bioethanol in petrol, and the MEC consortium recently decided to double its own contribution to the project to a total of DKK 460 million. But there has been a lack of political support to advance the project to the final step.

‘Losing 1,000 jobs’

Udby added: "We needed a green light from politicians to get the final component of the financing in place, including loans with municipal guarantees. Without loan guarantees, the project is no longer financially viable. So Denmark has to wave goodbye to DKK 293 million from the EU, but worst of all, it means losing 1,000 permanent jobs and the possibility of Danish green technology exports," said Jørgen Udby.

The project should be viewed as a local project, which could create growth and jobs, and be a platform for advanced bio-economics in Denmark, leading to national benefits in terms of climate and resources and substantial export opportunities, a statement from the Maabjerg Energy Center stated.

Thirteenth hour

Speaking to Bioenergy Insight, a Maabjerg Energy Center spokesman said an alternative majority in the Danish Parliament could still rescue the project by convincing the government to reconsider the scheme by backing a public guarantee for loans at a low interest rate.

The decision by government will be made by 14 October, 2016.

The spokesman said: “We have gone past the eleventh hour and we are at quarter past twelve moving on to the thirteenth hour.

“This part of the country has been hit hard by the financial crisis and a lot of people who traditionally were employed in the agricultural sector have been made unemployed. This project could have bought many jobs to this area.”

Udby concluded: "In other countries, similar large-scale demonstration plants have received a helping hand in the form of cheap financing in order to be realised. It's also the norm in Denmark for energy plants such as local CHP plants, biogas plants, district heating plants, waste plants and the like to be carried out with municipal loan guarantees.”

This article was written by Liz Gyekye, editor of Biofuels International.