The World Briefly

June 27, 2024

Against the Wind

Denmark

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Denmark will introduce the world’s first carbon tax on agriculture, as the European Union country is seeking to reduce greenhouse gas emissions from livestock, the Independent reported.

Starting in 2030, Danish livestock farmers will face a tax of $43 per ton of carbon dioxide equivalent, increasing to around $108 by 2035. However, an income tax break of 60 percent will only charge farmers roughly $17 per ton of livestock emissions per year from 2030, rising to $43 in 2035.

The agreement also includes incentives for farmers to adopt emission-reducing technologies.

The proposal is set to be approved by Denmark’s parliament later this year and follows months of negotiations between the governing coalition and various groups, including trade bodies and environmental organizations.

Officials said the initiative aims to cut Danish greenhouse gas emissions by 70 percent from 1990 levels by 2030, and move towards climate neutrality by 2045.

The tax – which will affect cattle and pig farmers – also follows the global challenge of reducing emissions from food production, a sector responsible for nearly a quarter of global emissions.

Ruminant animals produce methane – a powerful greenhouse gas – through digestion, while synthetic fertilizers also contribute to emissions. An average Danish cow produces nearly seven tons of CO2 equivalent per year.

The agreement has faced criticism from farmers’ organizations, who warned that it could stifle technological investments and impact farmers already implementing sustainable practices.

Meanwhile, some green groups believe the tax deductions are too generous.

Danish Prime Minister Mette Frederiksen and Climate Minister Lars Aagaard have emphasized the importance of agriculture contributing to the green transition.

The tax will also serve as a model for potential EU-wide agricultural emissions trading systems, the Financial Times noted.

The European Commission is exploring similar measures to incentivize farmers across the bloc to reduce their emissions, aiming to integrate agriculture into broader climate policies.

Dernmark’s proposal comes a few months after widespread protests by farmers across Europe against stringent climate change regulations, which they argue threaten their livelihoods and could lead to bankruptcy.

The new levy also mirrors New Zealand’s now-scrapped “burp tax” on sheep and cow emissions.

Initially set to take effect in 2025, the legislation was scrapped following strong opposition from farmers and a change in government after the 2023 election, which saw a shift from a center-left to a center-right ruling bloc.

New Zealand’s new government announced plans to explore alternative methods to reduce agricultural methane emissions, excluding agriculture from its emissions trading scheme.

This story originally appeared in the June 27, 2024 newsletter, Passing the Bar.