In a few days time, a five-fold hike in a pollution tax will hit about 1.6 million customers of district heating with higher bills.

But while it was initially thought that the rise in bills would be modest, about 125 kroner a year, the rise in the nitrogen oxide (NOx) tax which was outlined in the 2012 budget, could be far greater and place a burden on the least well off.

NOx emissions are produced during combustion and are classified as greenhouse gases.

Kim Mortensen, director of district heating association Dansk Fjernvarme said: “It will become noticeably more expensive but the precise bill will depend on what the plant is powered by.”

Residents of the north Jutland town of Brønderslev have been told that a normal 130 square meter home will end up paying an extra 787,50 kroner more for heating in 2012 because of the NOx tax.

“For us it will result in an extra cost of about 3.3 million kroner and we will have to retrieve that cost from our customers,” Anni Schkønning, utilities manager at Brønderslev district heating plant said.

The north Jutland price hike came as no surprise to the managing director of energy lobby group Dansk Energi, Lars Aagaard, who expects price increases of up to 1,000 kroner a year. He also expects local plants in small towns to be hardest hit while electricity prices would also likely rise as a result of the NOx tax.

Mortensen found the tax puzzling, as the price rises will most likely make it less attractive to use district heating.

“I thought with the government’s green push that they would think that district heating was a good thing,” Mortensen said.