The government said it would double investment in renewable energy to 1 billion Danish kroner ($173.77 million) a year from 2010, with the aim of cutting the use of fossil fuels by at least 15% by 2025.

The investment will be used partly for research into and development of second generation biofuel, highly efficient wind turbines, effective low-energy buildings, as well as hydrogen and fuel cells.

The government also said it aims to cut annual energy consumption by 1.25% a year up until 2025, and cover 10% of the transport sector's fuel use with biofuel by 2020.

It said it is prepared to set partial targets for biofuel use before 2020, considering that economical, competitive and environmentally friendly technologies have been developed.

Transport and Energy Minister Flemming Hansen said: "By doubling the use of renewable energy and with a very ambitious energy savings target, the government wants to secure a robust and environmentally just energy supply. At the same time we send a clear signal to the E.U. that Denmark is ready to pre-empt the coming discussions about the European Commission's proposal for the E.U.'s future energy policy."

He added he looked forward to discussing the proposal with the other political parties. "It is my ambition, that we will reach a broad settlement about the energy proposal," he said.

However, the opposition party, the Danish Social Democrats, called the proposal unambitious.

"The government is taking a step in the right direction, but it is far from impressive targets they are setting up," said Kim Mortensen, energy spokesman for the Social Democrats.

Renewable energy currently represents 15% of Denmark's total energy consumption, while 42% comes from oil, 23% from natural gas, 19% from coal and 1% from other nonrenewable energy sources.

Ministry of Transport and Energy Web site: http://www.trm.dk

-By Malin Rising, Dow Jones Newswires; +45 33 111 524; malin.rising@dowjones.com

(END) Dow Jones Newswires

01-19-07 0857ET

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