Danish pensions lobby group Insurance and Pensions Denmark (IPD) has responded to a new proposal by the government on road traffic emissions reductions by saying the pension industry is ready to invest in the energy infrastructure needed to make it happen.

Yesterday, the Ministry of Taxation published a proposal to cut CO2 emissions by one million tonnes in the road transport sector by 2030, employing measures such as changing the way cars are taxed, greener fuel and tolls for lorries.

The ministry said the initiative, which it said would mean having 500,000 green cars on Danish roads in 2030 rising to more than a million in 2035, was a step on the way to realising Denmark’s 70% target.

At the end of last year, Denmark’s parliament passed a new climate law committing to cut emissions by 70% from 1990 levels by 2030.

Kent Damsgaard, IPD chief executive officer, said: “We need to promote far more environmentally-friendly cars, and this requires massive investments in energy infrastructure. The Danish pension industry is ready to look at these investments.”

But he said large-scale investments required the establishment of a stable framework.

He said his group saw public-private partnership (PPP) investment models as “the way forward,” with private investors contributing capital and execution, and the ownership of the critical infrastructure remaining public.

Regardless of the specific goal, IPD said there would be a need for huge investments in the Danish electricity grid to support so many more electric cars.

The association also said that better regulation of the electricity grid was one of the recommendations made in the report from the financial sector’s climate partnership.

IPD said the government proposal would now go through an intensive round of negotiations with the parliamentary parties.

“Whether the goal of the government agreement will be 500,000, 750,000 or even more electric cars is difficult to predict,” Damsgaard said.

“One thing is for sure, the energy infrastructure will need massive investments to be able to support the increase, and those investments are interesting for the Danish pension industry,” he said.

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