In a pioneering move set to reverberate across the agricultural world, Denmark has become the first country to introduce a carbon tax on agricultural emissions.
This historic decision, which has been the subject of intense negotiations for months, will see Danish cattle farmers paying almost €100 per cow annually for their greenhouse gas emissions. The tax, scheduled to commence in 2030, aims to curb the significant methane output from livestock, particularly cows and pigs.
After months of deliberation involving trade bodies, environmental groups, and the Danish Government, the ruling coalition has agreed on an initial tax rate of 120 Danish krone (€16) per tonne of carbon dioxide equivalent (CO2e) emissions from livestock.
This rate is set to rise to 300 krone (€40) per tonne by 2035. The Danish parliament is expected to vote on this groundbreaking legislation later this year, with built-in incentives for farmers to reduce emissions and a phased introduction period featuring a 60% basic tax deduction for the first two years.
The average Danish cow produces about six tonnes of CO2e per year, translating to an annual charge of approximately DKr720, or €96.50, using the initial tax rate. This levy is part of Denmark’s broader strategy to cut emissions from food production.
Mette Frederiksen, Denmark’s centre-left prime minister, expressed hope that this initiative would serve as a model for other nations.
“This cannot continue,” emphasised Lars Aagaard, the climate minister. “Agriculture must contribute and be part of the green future.”
Denmark’s agricultural sector, dominated by pork and dairy exports, is forecast to account for 46% of the country’s emissions by 2030. Experts predict that the carbon tax will reduce emissions by 1.8mt in its first year, aiding Denmark in meeting its target of cutting 70% of total emissions by 2030.
However, the tax has not been without controversy. Farmers organisation Bæredygtigt Landbrug, which was excluded from the negotiation process, has been vocally critical.
“I think it’s crazy,” said Peter Kiær, chair of the organisation.
“The government isn’t listening to the farmers,” he added, arguing that the tax would stymie investment in much-needed green technologies.
Despite the backlash, there has been broad satisfaction among negotiators. The Danish Agriculture and Food Council succeeded in advocating for a tax model that exempts farmers employing approved and economically sustainable climate solutions.
Søren Søndergaard, chair of the council, acknowledged the difficulty of the negotiations but praised the outcome for balancing environmental goals with agricultural viability. As part of this comprehensive approach, the Danish government will allocate €5.3bn to reforest 250,000 hectares of agricultural land by 2045 and set aside 140,000ha of lowland by 2030.
Additionally, a new DKK 40bn fund will support initiatives like rewilding low-lying organic soils and reducing nitrogen emissions from fertiliser use. Economy minister Stephanie Lose hailed the agreement as a fundamental reorganisation of Denmark’s land and food production, anticipating significant realignment in the agricultural and food industry. The deal, supported by a so-called Green Tripartite, includes representatives from government, NGOs, and agricultural associations, reflecting a united front in addressing Denmark’s long-standing greenhouse gas emissions from agriculture.
As Denmark forges ahead with the plan, the European Commission is also exploring an EU-wide agricultural emissions trading system.
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