The EU’s biggest oil producer has taken a huge step: It’s ending oil production by 2050

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The EU’s biggest oil producer has taken a huge step: It’s ending oil production by 2050

Denmark has just taken a significant step to lead the world on addressing climate change. The country announced that it will phase out all oil and gas exploration contracts in the North Sea by 2050. It’s the first major oil-producing country to take such a big step.

Following a December 3 vote, the Danish parliament has issued a near-total ban on companies receiving new licenses to hunt for and extract oil. The agreement will also cancel an eighth round of licensing that was set to occur. Licenses that were issued before the vote will be honored until 2050.

“We’re the European Union’s biggest oil producer and this decision will therefore resonate around the world,” Danish climate minister Dan Jorgensen said on Thursday.

The move to end oil and gas contracts by 2050 is not going to be cheap as it’s estimated to cost Denmark $2.1 billion, but the country appears ready to foot the bill. “It’s a tough decision, it’s an expensive decision, but it’s the right decision,” Jorgensen told the Washington Post.

Denmark has been extracting oil and gas from the North Sea since 1972. Tax revenue from oil and gas production has greatly benefited its economy, helping to build the Danish welfare state that takes care of its citizens across their lifetimes.

But ending oil and gas extraction and exploration, experts say, is the only way Denmark can meet the European Union’s climate pledge. In October, the European Union voted to cut greenhouse gas emissions by 60 percent from 1990s levels by 2030.

The decision, which passed overwhelmingly, increased the bloc’s pledge to the 2016 Paris Agreement, signaling Europe’s serious commitment to ending the climate emergency.

Denmark’s plans put the country in line with regional targets.

“It’s taking a measure that will probably ensure that Denmark can meet this goal within the EU of reducing emissions to the point where they can pursue carbon neutrality by 2050,” Wil Burns, professor and co-director of the Institute for Carbon Removal Law & Policy at American University, told me. “And this is the only way they could effectuate that.”

Climate demonstrators gather around Parliament during the opening day on October 6, 2020, in Copenhagen, Denmark.
Ole Jensen/Getty Images

The vote also came due to increased pressure at home. Copenhagen, the Danish capital city, announced plans in late 2019 to become the first carbon-neutral capital in the world, achieving net-zero carbon emissions by 2025.

And as Reuters reported in June, the Danish Council on Climate Change, an independent body that advises Denmark’s government, called for an end to oil and gas activities to salvage the credibility of Denmark as a leader in the fight against climate change.

“A Danish halt for further exploration in the North Sea could send a strong signal in international climate politics and may even encourage other countries to follow suit,” the council said at the time.

The international environmental activist organization Greenpeace expressed their support for the decision on Twitter, heralding the move as a “landmark decision.”

Ending oil production by 2050 has been welcomed — and criticized

The move was also hailed by EU government officials including Finnish Minister of the Environment and Climate Krista Mikkonen, who applauded the decision via Twitter saying that the world needs more leaders on climate change.

Some other environmental groups were also happy. “This is a huge victory for the climate movement,” Helene Hagel of Greenpeace Denmark said in a statement. She added that Denmark has “a moral obligation to end the search for new oil to send a clear signal that the world can and must act to meet the Paris Agreement and mitigate the climate crisis.”

Swedish climate activist Greta Thunberg was far less impressed, though, tweeting that the decision means Denmark will continue extracting oil and gas for another 30 years.

Denmark’s decision shows that Paris and regional and national commitments to reducing emissions are starting to have some real impact — and that’s good.

As the top oil producer in the European Union, Denmark’s move is significant, but other oil producing nations must take a similar pledge if there’s any hope of achieving the Paris Agreement’s target of limiting warming to 2 degrees Celsius.

“You’re going to need a lot of other countries, especially major oil and gas producers, to step up,” Burns told me. “Norway and the UK both feel pressured to remain leaders on pursuing the climate agenda.”

While the UK and Norway are both major oil-producing countries and located outside the EU, the desire to lead on climate change could push the nations to make stronger commitments.

On December 3, the UK announced ambitious plans to cut emissions by 68 percent compared to 1990 levels by 2030. A report also calls on UK oil and gas firms to phase out production in the North Sea and make the transition to renewable energy sources. Peer pressure could also help further pave the way.

Neighboring Norway, Burns noted, is a much larger producer of fossil fuels, so a commitment to end oil and gas extraction would be a much more dramatic step for that country to take.

“If the US, this year or next year, starts to return as a positive force on climate, that along with measures like this one from Denmark might put pressure on other countries to do so,” Burns said.

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