Denmark, with its stunning landscapes, Lego bricks and Danish pastries has been declared as the country with the happiest population in the world for many years. It has almost a hundred percent literacy rate and one of the best education systems in the world.
Denmark is also leading the world in renewables and today, it generates a remarkable 67% of its electricity supply from renewables, of which wind energy contributes an impressive 46.8%, while biomass contributes another 11.2%.
The year 2024 marks seventy-five years of the Pakistan-Denmark relationship. Today, there are around 52 Danish companies with business interests in Pakistan. They include major companies like A.P. Møller/Maersk, DSV, F.L. Smidth, Beierholm, Eldan Recycling etc. In 2022, Pakistan exported goods worth $177 million to Denmark, whereas Denmark exported $124 million of goods including medical and pharmaceutical products.
Other than trade and commerce, the Danish Government through the IFU and the DANIDA Sustainable Infrastructure Finance has assisted Pakistan in the construction of more than fifteen projects, including two wastewater treatment plants in Faisalabad and Lahore.
TFT spoke with the Ambassador of Denmark in Pakistan, His Excellency Jakob Linulf. Ambassador Linulf has a wealth of experience and expertise in trade and business promotion, climate and energy sectors. He has been busy in Pakistan promoting cooperation between the two countries in a number of areas, and supporting the work that the Danish embassy does for assisting Pakistan in the green transition and building the expertise needed for climate change adaptation.
TFT: Denmark is on top of the Climate Change Performance Index again. As one of the global leaders in climate change adaptation and mitigation, how is Denmark helping Pakistan in tackling this challenge?
Ambassador Linulf: For tackling climate change, of course adaptation is the best way forward. Whatever knowledge we have in that respect, we would like to give to Pakistan. As for mitigating climate change, we stress transitioning to renewable energy. In the last 40 years, Denmark has completely transformed its economy and its energy sector and now most of our energy mix is based on wind, hydro and biomass. So this technology transfer is the most beneficial thing that would help accelerate the green transition in Pakistan. Our ministers of energy and climate change in Denmark are working closely with their counterparts in Pakistan on this transition from oil and gas to renewable energy. We are also introducing technologies for energy efficiency in Pakistan.
TFT: Can you tell us about how Denmark is helping Pakistan with technology transfer?
Ambassador Linulf: The most important initiative for green transition is the agreement to support Pakistan’s green transition through the Danish Energy Transition Initiative’ (DETI) which was signed in 2021. Through this agreement, relevant technical authorities exchange knowledge and the Danish authorities are providing technical assistance to the Ministry of Energy and AEDB. But although the embassies play their role, technology transfer is mostly through the private sector which has the capacities to make it commercially viable. Danish companies have the latest technology and expertise for that. They are also very energy efficient, accustomed to working with renewables and have the solutions on the shelf. So we have both the framework from the government side, but also the companies who can actually implement it.
But in order to optimize the benefits of mutual cooperation, the governments here have to set up the right frame and the right conditions. We need to have the right policies in place along with the right vision. It took us forty years for our transition to renewable energy but one of the key reasons was that we had some politicians who carried on the same policy and implemented the same vision. Pakistan should also have stable regulatory frameworks and laws in place in order to maximize the benefits.
TFT: Is Pakistan ready for a green transition?
Ambassador Linulf: You see, a green transition is not an easy thing anywhere. It was difficult in Denmark and we are a uniform country of 5.5 million. Here in Pakistan, a green transition is much more complex. It is a much bigger and more diverse country of 240 million people, so nobody expects it to be easy or quick but I would say, there are many important things missing like frameworks and policy that need to be put in place and we have not reached that stage yet.
TFT: What do you think needs to be done in terms of developing investor’s interest in this sector?
Ambassador Linulf: Setting up any kind of energy infrastructure plants, wind turbines, or waste management plants is very costly and one can only get investors if there is a long-term stability framework, particularly economic stability. Boosting long-term investor’s confidence would be possible through economic stability, long term planning and vision and policies frameworks that are not going to be changed rapidly.
TFT: You are also supporting training for carbon trade in Pakistan. Tell us a little about that.
Ambassador Linulf: Well, Pakistan has not really entered the carbon market at present; both for the mandatory schemes or the voluntary schemes. Again, there is a need to create the right framework for that both in terms of carbon inventory and carbon exchange. Carbon finance and carbon trade is not an easy thing to do. It's not as if you can plant a billion trees and then retrospectively ask someone to buy the carbon credits. It needs to be taken in from the very beginning as you plan these projects. There is undoubtedly a lot of potential, but Pakistan has not yet developed the framework and it is still not mature enough.
We are doing what we can with imparting training on carbon trade, through supporting SDPI, but also trying to work with Pakistani authorities to get a framework up and running. In Pakistan, initially, heavy energy consuming industries like cement, steel, fertilizer can be tackled for emission reductions and then you can have carbon sequestration, reforestation projects also but the only project we have seen as yet, in Pakistan is the mangrove project.
TFT: Can Pakistan benefit more from the carbon trade market?
Ambassador Linulf: You see carbon trade is not a cash machine. It is a tool to get finance for emission reduction projects which otherwise might not have taken place so it's good to plant forest or an energy efficiency plant, and you should go ahead and do it without being too focused on carbon trade. But if you also get the carbon finance for it to make the project sustainable then of course it adds further value to it.
TFT: Tell us a little about the Danish ‘alumni’ you refer to?
Ambassador Linulf: In Denmark, we have a very robust Pakistani community, roughly about forty thousand people and many of them are very active socially in Pakistan also. This year is very important for us because we are celebrating 75 years of our diplomatic relationship with Pakistan and one of the key components of that relationship are Danish Pakistanis. A lot of them are in business, commerce, and philanthropy. Some of them have moved back to Pakistan permanently and we call them ‘alumni’. Most of them have a very positive image of Denmark and they work as a bridge for building further relationships between the two countries. Many of them are bringing much of what they have learned in Denmark to Pakistan including technology, investment, trade or simply building good mutual ties.
TFT: How well is trade and commerce growing between Pakistan and Denmark?
Ambassador Linulf: Trade between Denmark and Pakistan has been steadily increasing over the years. Right now, there is a very positive momentum in the trade ties between our countries. Many more Danish companies are looking at Pakistan with interest. Denmark has some very big companies into transport and shipping. Maersk is the biggest company and they run a big facility in Port Qasim and now it is looking for even more investment in ports in Pakistan. We also have DSV which is now the biggest transportation and logistics solution provider in Pakistan. These two companies are also taking a lead in decarbonizing the trading and shipping industry. Danish pharmaceutical company Nova Nordisk is working here which is a world leader in producing insulin; a much needed drug in Pakistan. The rate of diabetes is very high in Pakistan and a third of the population suffers from diabetes, yet, the awareness and information regarding it is very low. So, we are doing efforts to raise awareness for diabetes.
TFT: Your Excellency, how has your overall experience been working in Pakistan in all these different and challenging areas?
Ambassador Linulf: I have been in Pakistan for the last two years and I have found Pakistanis to be enormously hospitable. Wherever I have been in Pakistan, I have always been welcomed with big smiles and people like to interact very much. I feel very privileged to be living in Islamabad and it's a beautiful place like the rest of Pakistan. I am just glad that we are working to promote business and investment and trying to make the world a more sustainable and climate friendly place.