A 50-year-old Danish energy crisis offers a blueprint for Australia’s transition to a true circular economy.
It is hard to imagine a quiet Sunday on Australia’s major motorways, completely devoid of vehicles, but for Denmark, the oil crisis of 1973 created exactly that reality.
Faced with soaring energy costs and a dependence on imported oil for more than 90 per cent of its energy, the Danish Government introduced car-free Sundays – a clear, immediate, and unsettling sign of national vulnerability.
It was also the unlikely starting gun for one of the world’s most successful, sustained green transitions, offering lessons for Australia’s own resource recovery sector as it grapples with its complex waste and energy future.
Today, Denmark is ranked number one globally for climate change action, a title built not just on policy but on a fundamental shift in national mindset.
At Waste Expo Australia 2025, Ingrid Dahl-Madsen, Danish Ambassador to Australia, New Zealand and Fiji, reflected on the country’s history, explaining that the moment of vulnerability transformed into a national commitment to resilience and independence.
“It was clearly, when you look back today, the turning point for our energy policies in Denmark,” Ambassador Dahl-Madsen said.
“It taught us that energy security is not just about resources. It’s about resilience. It’s about independence.”
She said that the shock was also significant for future generations, instilling a deep, almost instinctual conservation ethic.
“Everyone learned at that time the need for saving resources. You never left a room without turning off the lights. You never left the water running when you were doing dishes. It was just integrated into how we were and how we grew up,” she said.
“As kids, we all learned about the value and the importance of saving our resources.”
The oil crisis pushed Denmark to diversify and innovate, transforming its energy story from one of black dependence to green determination.
It spurred the development of new sectors, notably the country’s world-leading wind industry. Now, more than 80 per cent of Denmark’s electricity comes from renewable sources, and the country is on track to achieve 100 per cent green electricity by 2027.
Despite this success, according to the Circularity Gap Report, Denmark’s economy is only four per cent circular, only slightly below Australia’s 4.3 per cent.
The low score, Dahl-Madsen said, stems from a high consumption of virgin materials. She said the global challenge is shifting from clean energy production to sustainable consumption.
Denmark’s journey toward a circular economy has been underpinned by legislation and deeply embedded community involvement. It was the first country to introduce a recycling law in 1978, which mandated that at least 50 per cent of beverage packaging and paper be recycled.
This, Dahl-Madsen said, fostered a culture of circularity from the ground up. She shared an anecdote about childhood pocket money:
“I grew up in a small town in Denmark called Skanderborg. Each August, a music festival rolled around, and every child in Denmark knew that they would be earning some big bucks collecting,” she said, referring to collecting refundable beer bottles.
“We didn’t call it a circular economy at that time, but that is really what it was.”
This early national deposit scheme boasts a 93 per cent return rate for bottles and cans, with 99.7 per cent recycled in a closed loop. More remarkably, due to extensive sorting, only one to two per cent of household waste in Denmark goes to landfill.
Dahl-Madsen said success is maintained by a highly structured national framework: the Danish Circular Economy Plan (2020-2032) is an ambitious roadmap that sets out 129 initiatives across the entire value chain, focusing on three key sectors: plastic, biomass, and construction.
The goal is simple: to make circularity the easy choice, not the expensive one.
She provided real-world examples of how the framework translates to industry, including the Kalundborg Industrial Symbiosis – a partnership between 17 public and private companies where one company’s waste stream becomes a valuable resource for another, achieving savings and minimising waste.
The famous Copenhill waste-to-energy plant in Copenhagen, designed with an artificial ski slope on its roof, provides electricity and district heating to 150,000 households. Dahl-Madsen said it is so efficient at diverting residual waste that the facility imports waste from other European countries to meet its energy needs.
Closer to home, the Quay Quarter Tower in Sydney, designed by a Danish firm, achieved embodied carbon savings equivalent to 35,000 flights between Sydney and Melbourne by retaining 65 per cent of the original structure.
Dahl-Madsen said perhaps the most vital learning for Australia is in Denmark’s collaborative approach. The transition wasn’t led by government alone, nor by industry in isolation, but through intense public-private partnerships.
The country launched 14 climate partnerships – one for each major sector – to co-design pathways to 2030 emissions reduction targets, which led to the landmark Green Tripartite Agreement between the government, agriculture industry, and environmental organisations.
“Collaboration has really been what has pushed the green transition in Denmark,” she said. “A circular economy requires all hands on deck – government, industry, environmental organisations, all of us to push it, both nationally and internationally.”
