Nordic Sugar will stop sugar production at its Nakskov factory in January 2027, removing the largest customer from Denmark’s new 1.5 billion kroner gas pipeline to Lolland-Falster.
The pipeline was inaugurated in 2024 and was sold as an investment in local business and lower emissions. Now the closure of the sugar factory in Nakskov leaves open questions about the economics of the project, DR reports.
When the state decided on the pipeline in 2021, the aim was to give companies access to gas while cutting CO2 emissions. According to Politiken, the 115 kilometer line was built mainly to supply the sugar factories in Nakskov and Nykøbing Falster.
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The original price was well below one billion kroner. Berlingske notes that rising construction prices and the war in Ukraine pushed the bill to around 1.5 billion kroner. Trade outlet Klimamonitor reported a 2021 budget figure of about 792 million kroner.
Hans Henrik Lindboe, partner at the consultancy Ea Energianalyse, told DR that he warned against the choice at the time. Per Lindboe, the state should have helped industry shift from oil to electricity rather than to gas.
He added that all forecasts point to falling gas consumption and more electrification of Danish companies. That leaves a 1.5 billion kroner investment to be paid for by fewer and fewer gas customers, according to Lindboe.
Who pays the bill
Lindboe stated that the bill is not sent directly to the state. Instead, the costs of the gas infrastructure are covered through levies paid by gas consumers across Denmark. He said he fears the expense will ultimately land with the companies that still use large volumes of gas.
Brian Vad Mathiesen, professor of energy planning at Aalborg University, has previously criticized the project. As reported by DR in 2024, he called the pipeline a major loss-making project for society and argued that public money should have gone into converting the sugar factories to green electricity.
Climate Minister Samira Nawa of the Social Liberal Party has also distanced herself from the decision. According to Berlingske, citing Ritzau, she described the pipeline as an expression of an outdated mindset and said Denmark must use less gas and more electricity.
The closure itself was announced on August 25 by the German owner Nordzucker. Politiken reports that production will stop after the 2026/27 campaign, ending more than 140 years of sugar production in the town. The company points to overcapacity in the European sugar industry and the need for a more efficient production network.
Berlingske reports that around 150 jobs will be affected in Nakskov and the surrounding area. English-language outlet The Copenhagen Post notes that the site will continue as a packaging and distribution facility, while production remains in Nykøbing Falster.
