The overall purpose with the Danish agreements on energy efficiency is to reduce the carbon dioxide (CO2) emissions from industry in order to achieve the national objective on CO2 reductions. The agreements were introduced in 1996 as part of the Green Tax Package which introduced green taxes on industry, trade and services, and a recycling of tax revenues through subsidies to the industry. Tax rebates were given to energy intensive firms on condition that they entered into a binding agreement on energy efficiency with the Danish Energy Agency. In this article we review existing studies of the Danish agreements in order to evaluate their environmental effectiveness and economic efficiency.