DENMARK Trends and Developments Contributed by: Henrik Sjørslev, Peter H. Knudsen, Henrik Lund-Koefoed and Levent Kitir, DLA Piper Denmark
This underscores the growing importance of robust legal and financial structures that can accommodate change – including mechanisms for restructuring and adaptation when market conditions deteriorate. Projects must be designed not only for success but also for resilience. This includes contractual flexibility, access to refinancing options and legal pathways for restructuring in case of distress. Ultimately, Denmark’s green industrial ambitions will depend on its ability to align political vision with mar - ket realities. Ensuring regulatory stability and legal adaptability will be key to sustaining investor engage - ment and delivering on climate goals – especially in a sector where execution risk is no longer the exception, but increasingly the norm. Legal Complexity and the Role of Insolvency Law in the Green Transition As the green transition accelerates, Danish insolvency law is being tested in new and increasingly complex ways. Green energy firms operate within intricate asset structures – including renewable energy cer - tificates, net access rights and subsidy agreements – often embedded in long-term, cross-sectoral frame - works that demand careful legal and commercial inter - pretation. These instruments are not only financially significant but also politically sensitive, as they are closely tied to national climate targets and EU-wide energy strategies. Restructuring efforts in the sector rarely follow stand - ard templates. They require co-ordination across a wide range of actors: public authorities, regulators, technical experts and international stakeholders. Insolvency practitioners must be able to assess the viability of ongoing energy production, renegotiate regulatory obligations and preserve access to critical infrastructure – all while maintaining compliance with environmental targets and subsidy conditions. This is particularly relevant in the Nordic region, where ener - gy infrastructure and corporate structures are deeply integrated across borders. Further, the legal environment surrounding green energy is multilayered and dynamic. Many contractual arrangements – such as power purchase agreements (PPAs), grid connection contracts and land use rights
– are governed by both Danish law and EU directives. In addition, EU state aid rules and climate-related funding mechanisms introduce further complexity, requiring practitioners to navigate supranational legal systems and anticipate regulatory shifts. Legal practitioners are increasingly required to oper - ate within this hybrid framework shaped by EU regu - lation, public-private financing models and cross- border co-ordination. The traditional boundaries of insolvency law are being tested as practitioners must now engage with energy market regulation, subsidy schemes and environmental compliance obligations – often simultaneously. All of the above-mentioned factors place a high burden on the professional community. Lawyers and financial advisors must combine deep insolvency expertise with a working understanding of energy regulation, climate finance and the operational realities of energy markets. Cross-border legal co-operation is increas - ingly necessary, and interdisciplinary collaboration is no longer optional – it is essential. Moreover, the sector’s exposure to long-term con - tracts and state-backed incentives means that insol - vency proceedings can have broader economic and policy implications. The failure of a green energy firm may not only affect creditors and shareholders but also disrupt national climate targets and regional ener - gy supply. As a result, insolvency law is evolving from a reactive tool to a proactive mechanism for managing structural adjustment in a strategically vital part of the Danish economy. In this context, insolvency law must evolve from a reactive winding-down mechanism to a strategic tool for managing transition risk, preserving critical infra - structure and enabling adaptation in sectors central to climate policy. The 2021 reforms to Denmark’s in- court restructuring regime – which introduced greater flexibility and debtor-in-possession elements – pro - vide practitioners with the tools to guide owners and management through complex restructurings aligned with long-term policy goals. Used proactively, these instruments can help stabilise firms, protect public investments and support the broader energy transi - tion.
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