Procurement regarding Carbon Capture and Storage as a service

ARC Holdingselskab A/S (“ARC Holding”) is the holding company of an inter-municipal waste management company group (“ARC”) operating in Copenhagen, Denmark, and four surrounding municipalities. ARC assists the general public as well as companies to dispose of their waste in an environmentally and climate friendly way. ARC manages waste for five Danish owner municipalities – Dragør, Frederiksberg, Hvidovre, Copenhagen and Tårnby. ARC is operating the waste-to-energy plant Amager Bakke located close to Copenhagen (“Amager Bakke”). Amager Bakke incinerates domestic and international waste and produces electricity and district heating for the yearly need of approximately 90,000 households. Like all other combustion processes, waste energy also emits CO2, in case of the flue gas from the waste incineration of Amager Bakke this is up to 500,000 tonnes of CO2 annually. ARC is working towards CO2-neutrality by establishing a large-scale CCS-solution at the Amager Bakke site. This will be an important contribution to both the green transition in Denmark and Copenhagen's ambitions to reach CO2-neutrality. For the CCS project and the collaboration between ARC Holding, E.ON Energy Projects GmbH (“EEP”) and E.ON Carbon Capture Solutions Copenhagen ApS (“ECCSC”), the parties have signed a Joint Development Agreement (“JDA”) with the following scope: 1) The obligation of ARC Holding and EEP to perform and finalize all project development activities related to the CCS project up to a final investment and commitment decision by the relevant decision-making bodies of the parties. 2) The obligation of ARC Holding and ECCSC to enter into a Flue Gas Agreement (“FGA”) based on the main terms and conditions as outlined in the JDA by which: • ECCSC will develop, own, and operate a carbon capture plant at Amager Bakke. • ARC will deliver flue gas to ECCSC and pay for the service provided by ECCSC of handling the fossil fraction in the flue gas in accordance with the agreed specifications. • ECCSC will accept the CO2-rich flue gas, remove the CO2, and then return the CO2-depleted flue gas to ARC. • ECCSC will procure the CO2 transport and underground storage. Accordingly, ECCSC intends to provide to ARC Holding the entire value chain from the point of flue gas delivery to the carbon capture plant as well as transport and underground storage of the captured CO2. ARC Holding’s procurement from EEP and ECCSC consists of two phases: (i) the project development phase and (ii) the project execution phase. The project development phase is covered by the JDA, which ARC Holding, EEP and ECCSC have entered into on 25 March 2025 - after the expiry of a 10-day standstill period following the publication of a voluntary ex-ante transparency notice. The project execution phase is covered by the FGA as outlined above. The contracting party on ARC Holdings side will be a subsidiary of ARC Holding yet to be established for the purpose of being the relevant party to the FGA (the “Flue Gas SPV”). The Flue Gas SPV will be a limited liability company operating on commercial terms in accordance with the requirements of Act no. 1647 of 30 December 2024 concerning CO2 capture activities in the utility sector. Thus, the FGA will be first concluded by ARC Holding, and subsequently the FGA including all of its rights and obligations will be assigned to the newly established Flue Gas SPV. The project is related to ECCSC's participation in the Danish Energy Agency's Tender for Contract on subsidy for carbon capture, transport and storage, cf. contract notice no. 604064-2024.Main features of the procedureARC Holding has conduced a negotiated procedure without prior call for competition with E.ON Energy Projects GmbH and E.ON Carbon Capture Solutions Copenhagen ApS. In this connection ARC Holding has published an voluntary ex-ante transparency notice in accordance with the procedure in section 4 of Act No. 593 of 2 June 2016, on the Complaints Board for Public Procurement (the Complaints Board Act). Therefore, the JDA has not been concluded until the passing of 10 calendar days from the day after the publication of the voluntary ex-ante transparency notice, cf. section 4, subsection 1, no. 2 of the Complaints Board Act. Justification for the direct award of contracts is stated under "Results".