The Danish energy giant, Ørsted, has come out with a resoundingly large deficit in 2023 with a total loss of 20,2 billion, and many investors are probably wondering whether the company is really robust enough and can withstand the storms of the global energy market.

An increasing net debt of DKK 47,4 billion also weighs down in a market where you no longer get extra tailwinds with low interest rates.

The state, which owns 50,1 percent of the share capital, has lost over a few hundred billion kroner from the falling share prices, but will the state throw extra money into the company when it will probably soon have to do a capital increase? CEO Mads Nipper is no longer so secure in the saddle, and the chairman of the board has just resigned.

The financial performance has been miserable in recent years, and it has not made it any easier that large planned projects for offshore wind have become significantly more expensive and have been shut down again.

In that sense, Ørsted is not just a victim of market forces and price inflation, which has affected the entire value chain, but also a victim of the lack of courage and initiative shown by the responsible politicians.

The Danish panic closing of the open-door scheme for offshore wind is an example, and in Europe it is far, far too slow to get new wind projects approved.

Worse is that it is given over globally 7.000 billion dollars in direct and indirect state support for fossil fuels, and the support has increased after the energy security crisis.

This creates deeply unfair competition in relation to energy companies that, like Ørsted, invest heavily in green energy solutions. The fossil subsidies should be phased out as soon as possible, because they fuel the global climate crisis.

Ørsted is in many ways a deeply likeable company that is a top green performer on a number of measuring points. And Corporate Knights voted Ørsted as the greenest of all the world's energy companies in January.

As Danes, we can be proud of that. Ørsted markets itself as a nature-positive company that makes green solutions and sets up wind farms for the sake of the climate.

The company would like to deliver a positive impact for biodiversity, and in collaboration with WWF, they are even developing 3D printed reefs for offshore wind turbines to do something good for the environment and the fish's spawning opportunities.

Their energy plan is full of positive words about wanting to increase green electrification, phasing out fossil fuels and accelerating green electricity.

Ørsted also has ambitious goals for a circular economy, they develop low-emission steel for wind turbines, they have a goal to drive only electric cars from 2025, and according to the annual report, the company has halved its CO2 emissions since 2021, and this is both in Scope 1 , 2 and 3.

From the outside, the green results are impressive. The company really deserves a lot of praise for the aforementioned green ambitions, and the main state shareholder and Danish society can be proud of all the areas where Ørsted really makes a green difference.

But Ørsted also has a dark shadow side, which drags it down. This is the company's large burning of solid wood biomass of approximately three million tonnes per year.

Ørsted is still the country's largest energy company within the burning of wood biomass. Biomass plants have largely replaced coal power plants, and over several years politicians have given billions in state subsidies to convert biomass into electricity, and today the burning of biomass accounts for approximately two thirds of all renewable energy in Denmark.

From that point of view, it can be said that Ørsted has acted as Danish politicians have wanted. But it just doesn't connect at all with the brand position that the company otherwise seeks to build up as a nature-positive and green front-runner company.

And it undermines the great efforts that the company's talented employees make to live up to the EU's green taxonomy and increasingly strict green reporting requirements.

If you really seriously want to make a difference for the sake of the climate, Mads Nipper and his management should systematically immediately launch a strategy to phase out biomass and instead install large industrial heat pumps powered by clean solar and wind power, with batteries and other forms of energy storage such as backup. Finally, the energy solution of the future.

In terms of energy efficiency, it will be far more efficient, because heat pumps powered by the sun and wind are several times more efficient than stoves that burn solid wood biomass.

In addition, the European Research Council has stated in a expert report, that burning biomass requires between 50-100 times more land area to produce the same amount of energy as from sun and wind.

Still, Ørsted is holding on to the old biomass plants, even though a plan for phasing them out should be drawn up today rather than tomorrow, before they reach the obsolescence deadlines in 10-20 years.

Over 20 years, emissions from a power plant burning with solid wood biomass will be almost equivalent to a coal-fired power plant, as the emission factor is far too high, and the company cannot "brand" it as sustainable.

94 percent of that biomass, that is fired in Ørsted's cogeneration plants is solid wood biomass, more than half of which is shipped in from the Baltics.

Some are also shipped all the way across the Atlantic Ocean from the USA, but this practice is described in Ørsted's annual reports as sustainable biomass. Yes, the company makes an effort to ensure that the wood comes from certified forestry, but the long supply chains with ships powered by diesel and logging in forests with diesel-powered machines is far from sustainable.

Worse is that you constantly remove a natural biological store in the forests, which otherwise sucks CO2 out of the atmosphere, and it takes many years before the forests grow back to suck as much CO2 out of the atmosphere.

Denmark's burning of solid biomass is currently behind a net emission of approx 15-16 million tonnes of CO2, where Ørsted has a very large responsibility. It is embarrassing that one of the world's leading green front-runner companies is not washing away the black stain soon.

But no, you fight tooth and nail to maintain the climate-damaging part of the company. With DKK 8,2 billion in state aid, Ørsted will build new energy-intensive CO2 capture facilities at the end of the chimney of the biomass plants in Avedøre and Asnæs, so that solid wood biomass can continue to be burned off in the furnaces.

One imagines that it helps to create a more resilient energy system and that it is green energy. But in terms of climate, it is completely black.

Worse is that it will backfire 20-30 years, before Ørsted's CO2 capture plant will have captured more CO2 than the biological stock in the forests, which has been removed by burning so much wood biomass.

On top of that, Ørsted must not only ship millions of tons of wood biomass in from the Baltics and North America on diesel- or LNG-powered ships to keep the furnaces running, but then the captured CO2 will be shipped with LNG-powered ships all the way to the Norwegian west coast, where it must be pumped into large warehouses under the seabed.

It is a system with a large waste of energy and climate-damaging effects in several stages, but this is a real Ørsted story. And you can hardly believe your eyes.

When will top management take the plunge and cut this unsustainable part of the business? The focus should be Ørsted's strong future vision of building a world powered by clean green energy and regenerating nature and biodiversity. The burning of solid wood biomass does not.

The comment was also brought to the Alting on 9 February 2024.