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Denmark said Friday it would use a tax hike on smaller North Sea oil producers to pay for a 27.5 billion (3.69 billion euros or $1.74 billion) investment in the country's railway network.
The revenue will be poured into Togfonden DK (the Train Fund), a fund that will be used to upgrade Danish railways and electrify the network's key routes.
"With the new fund we can finance a significant boost of state-owned collective infrastructure, which will benefit all Danes using public transport on a daily basis," Tax Minister Holger K. Nielsen said in a statement.
The government said it was unable to change an existing tax agreement with the Danish Underground Consortium (DUC), which is responsible for the majority of the Scandinavian country's oil production, meaning smaller companies like state-owned DONG will bear the brunt of the tax rise.
DUC is owned by A.P. Moeller Maersk (31.2 percent), Royal Dutch Shell (36.8 percent), Chevron (12.0 percent) and the state-backed Danish North Sea Fund (20 percent).
"The trains of the future are electric. Therefore, we will electrify all main lines in Denmark, as soon as possible," Transport Minister Henrik Dam Kristensen said in a statement.
Denmark's centre-left government has struggled to turn around a sputtering economy after being harder hit by the financial crisis than its Scandinavian neighbours.
A growth plan unveiled earlier this week slashed the country's corporate tax rate, drawing ire from the country's top unions and members of the ruling three-party coalition.
Electrifying the railway network is expected to be a popular move with Danes after the polluting IC4 diesel trains bought from Italy in 2000 were heavily delayed and had to be taken out of service amid concerns over their brakes and exhaust fumes.