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Danish town seeks green transition redemption

Sergio Matalucci Skive, Denmark
July 18, 2022

An industrial park in Skive is trying to solve two of Western societies' most urgent problems: climate change and the effect of urbanization on rural areas. A pilot project is showing circular economy at its best.

A GreenLab biogas production site
GreenLab's concept draws on the resources of the entire community to fuel industrial and power productionImage: Sergio Matalucci/DW

On the outskirts of Skive — a small Danish town of 20,000 inhabitants — the GreenLab industrial park is trying to validate energy systems based on the concept of circular economy. Inaugurated two years ago, the site wants to create a symbiosis between companies, allowing them to share their excess resources and eventually use the others' waste as feedstock.

The industrial processes at GreenLab are powered by renewable energies, including wind turbines with a total capacity of 56 megawatts (MW) and solar-energy installations of 24 MW.

"The main purpose is to attract new investors to the area. One of our purposes is also to show the world the benefits of our approach to a circular economy. We do not only look at theoretical systems, but we also implement them," Skive's mayor, Peder Christian Kirkegaard, told DW.

The mayor said GreenLab got the timing right, as the current focus on climate change, and the ongoing energy crisis, helped the Skive project make it into the headlines. Even former US President Barack Obama recently came to the town to speak about the green transition.

Speaking to DW in the mayor's office that overlooks the Skive Fjord on Denmark's Jutland Peninsula, Birgitte Bahat, head of communications of the municipality, noted proudly: "Skive is already on the map."

Green rural transition

Skive is a cozy place with a long fishing and agriculture tradition. But a huge budget problem in the wake of the 2008 financial crisis resulted in a social crisis that made Skive struggle for its reputation. Many young people have migrated since, leaving behind an aging population.

In the streets of Skive, bicycles are less common than in other Danish towns. Teenagers working in the local cafes explain that they prefer the capital Copenhagen or Aarhus, the major city in the Jutland peninsula, for their "diversity."

Asked about Skive's green transition and regional growth, they are not wholly aware of the developments at GreenLab some 11 kilometers (6.8 miles) away. "It sounds cool, but it is very complex," said one young woman working in a coffee shop.

The industrial park was co-funded by the local municipality, in hopes that GreenLab might contribute to solving Skive's demographic and social problems. The project has already created about 100 jobs, said Mayor Kirkegaard, who seems convinced the green transition will attract even more young professionals.

"Much of the green transition will take place outside the big cities because we have the space."

The municipality has already bought 55 hectares (136 acres) of land and invested a total of 80 million Danish kroner (€ 10.8 million/$10.74 million) in the industrial park. Revenues it receives annually from rent payments from companies are in the region of 3 million kroner. Under expansion plans, Skive is considering buying an additional 70 hectares.

According to Kirkegaard, the private-public partnership is creating benefits that would otherwise be impossible. "When you start a project like this, you will find a lot of barriers. The public sector can help solve the problem before it even becomes a problem. For example, working with related laws."

What is a circular economy?

Tackling complexities with partners

In May 2021, the Danish Energy Agency granted the GreenLab industrial park the status of an official regulatory energy test zone, allowing it to operate outside the existing electricity regulations. With the permit, the park can bring as much renewable energy online as it wants with the aim of gaining green-transition know-how, including clean energy storage, green fuels, agriculture and industry.

As hydrogen is scheduled to replace natural gas in production processes, GreenLab is, for example, expected to tackle the complexity of the shift and redesign production processes. GreenLab offers services to the companies located in the industrial park in order to find the gaps in their processes and overcome them with the support of researchers from Denmark's technical universities.

"We plan to start training projects directly within a year, which will serve entire Northern Europe for what concerns PtX [Power to Gas] project skills, but also integration with district heating, and water treatment," said GreenLab Chief Executive Christopher Sorensen.

Sorensen told DW that current investors are Norway's Quantafuel and Equinor and as well as consortia of local fishermen and farmers. Spanish-German Siemens Gamesa is active in the industrial complex too, as part of the EU-funded hydrogen project.

At the moment, GreenLab's partner Eurowind is installing the last wind turbines, while installations for a solar park will start in September. A hydrogen production complex is also planned and will be commissioned in phases. The first 6 MW of hydrogen electrolyzer capacity should enter operation within this year, with another 106 MW  being added within the next two years.

A repair ship moored at the base of an offshore wind turbine
Solar and wind energy will play a key role at GreenLab, where Eurowind Energy is an investor Image: Siemens Gamesa

Symbiosis at work

GreenLab is trying to merge corporate efforts with those of local green transition initiatives. Biomass and residuals from farms in the area are, for example, used to produce jet fuel. Manure is planned to become the primary feedstock for a biogas facility that will eventually power production processes. 

Sun and wind though, will remain the primary energy sources that power the electrolyzers to produce green hydrogen. The gas will then be mixed with CO2 — a byproduct of biogas production — to produce bio-methanol. Finally, excess green hydrogen is planned to be used in biogas production where it interacts with bacteria to boost output.

Moreover, one company in the industrial park aims to extract proteins from Denmark's endemic starfish to replace soy-based animal feed for the region's farmers. And Quantafuel, which is working on solutions to the world's plastic waste problem, has set up a plant to transform soiled plastic into new products, collaborating with clients like BASF and Lego.

CEO Sorensen thinks "everything that is locally based makes the puzzle easier."

"You identify the resources available in the region, create community engagement, and identify the things you don't have in order to achieve a circular economy. At that point, you invite new possible companies in," he said.

A former business consultant who moved from New York to Denmark more than two decades ago, Sorensen said companies' values and long-term commitment are key factors. Wind turbines and large-scale industry are often not attractive for local communities, he added, but it is different when they are part of a concept to create new competencies, supporting green transition and local growth. "This methodology could be soon replicated."

Denmark's greening

GreenLab is part of a broader decarbonization effort throughout Denmark. Under plans, the country's largest coal-fired power station will replace coal entirely with wood chips by 2023.

Denmark is also building a vast artificial island off the coast of Jutland to set up around 200 offshore wind turbines with a combined capacity of 3 gigawatts.

Another pilot project is being developed in Kalundborg, near the capital Copenhagen, where a plant will use industrial waste as a new source of revenue.

Denmark's renewable energy plans, including the buildup of green industrial parks and the urban-industrial symbiosis, are closely monitored by academic research to ensure that best-practice solutions are adopted on a wider scale.

How circular economy is shrinking global waste

Edited by: Uwe Hessler