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Denmark to end oil, gas extraction in North Sea, heaping pressure on UK to follow suit

Denmark has decided to end to all oil and gas offshore activities in the North Sea by 2050 - Matthew Lloyd /Bloomberg Finance
Denmark has decided to end to all oil and gas offshore activities in the North Sea by 2050 - Matthew Lloyd /Bloomberg Finance

Denmark has become the world's first major oil producer to stop offering exploration licenses, putting pressure on the UK to do likewise ahead of next year's UN Climate Change Conference.

As part of a political covenant agreed by all Denmark's parliamentary parties, the country will abandon its planned 8th licensing round, and end oil and gas production completely by 2050.

"We're doing it because we hope that we can inspire others," Denmark's climate and energy minister, Dan Jørgensen, told The Telegraph.

"We hope that we can be the country that takes one of the first steps towards a global alliance so that we can live up to the Paris Agreement."

The decision will cost Denmark some 13 billion kroner (£1.6 billion), according to a press release by the energy ministry, and prevent the production of about 150m barrels over the next 30 years.

Louise Burrows, policy adviser at UK campaign group Fossil Fuel Transition, said that the decision by Europe's third-biggest oil and gas producer would increase pressure on Norway and the UK, the top two, to follow suit.

"It's really holding the UK to account, it's a signal that the market is changing, and counties need to get ahead of the game," she said. "Really the UK should have done this first, as the host of COP 26. I think it's very realistic for the UK to do it now."

The move was received enthusiastically by some climate campaigners, with Helene Hagel, spokesperson for Greenpeace Denmark, calling it "a historic climate victory for which [we] have been fighting for years."

"One cannot underestimate the potential that Denmark can now become a pioneer country for winding down fossil fuels," she said.

Greenpeace called the move 'a landmark decision toward the necessary phase-out of fossil fuels' - Jiri Rezac /Greenpeace United Kingdom 
Greenpeace called the move 'a landmark decision toward the necessary phase-out of fossil fuels' - Jiri Rezac /Greenpeace United Kingdom

Others, however, were more cautious.

"The real news here is that Denmark will apparently go on extracting fossil fuels for another three decades," the Swedish teen climate activist Greta Thunberg wrote on Twitter. "To us children, this is not the 'good news' that some people seem to think. We're in a climate emergency. Act accordingly."

Danish Society for Nature Conservation also said it would have preferred an earlier end to production.

Under the agreement, oil companies will also be able to continue oil and gas exploration on their existing licenses and, according to the press release, will also have "access to two other licensing schemes with limited scope."

New Zealand in 2018 became the first major country to ban oil exploration, with Ireland and Italy following up with similar bans last year.

But the move is much more significant coming from Denmark. Since 1972, the country has earned more than 541 billion Danish kroner (£65bn) from North Sea oil, helping fund one of the world's most generous welfare states. The country is currently the 39th biggest oil and gas producer worldwide.

Denmark's Social Democrat government came to power last summer in an election in which the environment unexpectedly trumped immigration as the key issue.

Under pressure from supporting parties, it then committed to reducing emissions by 70 percent by 2030, later enshrining the commitment in a climate law binding on all future governments.