30. 06. 2025
AUTHOR: Strategic Perspectives
Denmark takes up the Presidency of the Council of the European Union (EU) at a time of geopolitical tensions, energy uncertainties, and major challenges for European industry. The Presidency’s priorities will be on three main axes: a secure, competitive, and global Europe.
Denmark’s track record and prominent role in the energy transition and net-zero industry allow it to advance discussions around the EU’s priorities, competitiveness and role in global politics. With Prime Minister Mette Frederiksen moving beyond the traditional ‘frugal’ stance, the Presidency can set the right tone for Member States’ positions on the upcoming EU Budget. At the same time, expectations are high that Denmark will advance Clean Industrial Deal reforms and forge a deal on the 2040 climate target as well as the 2035 goal. Copenhagen has the readiness and tools to move the EU debate further on critical issues and act as an honest broker.
1. Integrating the Clean Industrial Deal and the EU 2040 climate target
The European Commission’s plans to design a Clean Industrial Deal that helps deliver on a 90% climate target for 2040 speak to Denmark’s own strength. The country was the first among the 27 to back that target, while it plans to reach climate neutrality by 2045 domestically. The EU’s economy reaching a 90% reduction can bring socio-economic benefits for competitiveness, jobs, energy security, innovation, reducing fossil fuel demand and lower energy bills.
However, it will be a major diplomatic lift to deliver a qualified majority of countries backing the 2040 climate target in the European Climate Law and National Determined Contribution (NDC) with a milestone for 2035 by unanimity at the Environment Council on 18 September. Especially after French President Macron and Polish Prime Minister Tusk raised their concerns on timing, level of ambition and lack of enabling conditions, including investments at last week’s European Council. All eyes are now on Denmark and the European Commission to craft a political package that addresses some concerns, so the targets can provide guidance for the Clean Industrial Deal proposals and steer investments. Internationally, solid EU targets can encourage other big emitters such as China to put stringent targets forward, meet the UN deadline for NDCs at the end of September.
2. Delivering on the EU’s competitiveness agenda
Denmark is also well-positioned to bridge Member States on industrial competitiveness. As the Presidency opens on the Commission’s proposal EU Budget, it can open a broader debate on how to unlock rapid investments to support the net-zero industry and the decarbonisation of the energy-intensive industries. Dedicated Councils and informals on this will be key to creating convergence around investment tools that bridge the gap between the end of NextGenerationEU in 2026 and the future EU Budget starting in 2028.
Copenhagen will also have the chance to kick off the negotiations on the first Clean Industrial Deal legislation, the Industrial Decarbonisation Accelerator Act (IDAA) and the revision of the Carbon Border Adjustment Mechanism. It can contribute to shaping the Council’s position on the creation of lead markets and the European preference to support the EU’s strategic net-zero technologies.
3. Ensuring energy security and affordability in the EU
The EU’s long-term competitiveness depends on its ability to guarantee clean, affordable and secure energy. The Presidency can continue the work done by the Polish Presidency on reinforcing EU energy security. One top priority will be to conclude the negotiations and implement the Commission’s legal proposal to phase out Russian gas by 2027.
With nearly 45% of final energy consumption from renewable sources in 2023, Denmark can also promote an energy security paradigm for the EU that goes well beyond gas diversification. It is well placed to drive forward the electrification debate, in particular in view of the Electrification Action Plan and the Grid Package of the European Commission. While renewable electricity has progressed in the EU, with fossil fuel power declining in 2024, electrification has stagnated. And deploying renewables without electrification weakens the business case for clean energy, deters future investment and crucially, fails to cut fossil fuel use in key sectors. The Presidency can structure the debate on how to reach a 50% electrification of the EU’s economy by 2040 and strengthen cross-border infrastructure.
4. Demonstrating credible EU leadership at the international level
In a context of shrinking multilateralism, uncertainty on trade, and economic competition, the Danish Presidency can strike the right balance between advancing the EU’s economic interests and the global transition to climate neutrality. It will steer EU discussions for bilateral summits and on new priorities for climate and energy diplomacy. On these premises, the first key appointment for Denmark is the Informal Environment Council (ENVI) in Aalborg, which is set to discuss COP30. Denmark has played a leading role in international negotiations over the last years and thus has the networks, knowledge and skills to speak on behalf of the EU. The EU can work closely with the Brazilian COP presidency to deliver concrete outcomes.
In the ramp-up of COP30, Denmark will also be pivotal in forging dialogue with other key constituencies like the African Group and the Alliance of Small Island States (AOSIS), profiting off its solid relations with multiple geographies in the Global South. Moreover, Copenhagen will lead the debate on Climate Finance Conclusions ahead of COP30, with the aim of agreeing on an EU position coherent with the quest of leveraging private and public sources at the needed scale to contribute.
