Denmark to introduce a tax on agricultural emissions

Denmark has announced a groundbreaking carbon dioxide equivalent (CO2e) tax targeting greenhouse gas emissions from livestock, marking the first such initiative in the world, Kazinform News Agency correspondent reports, citing The Copenhagen Post.

The political agreement is the legislative consequence of the agreement on a green tripartite, which the government entered in June with several organizations, including Denmark’s Nature Conservation Association and Agriculture & Food.

Unlike traditional carbon taxes on fossil fuels, this tax addresses biological processes responsible for methane and other greenhouse gases, aiming to cut emissions by 1.8 million tonnes of CO2e by 2030, with the potential to reach 2.6 million tonnes.

The tax will be phased in gradually, starting at 300 kroner ($42) per tonne of CO2e in 2030 and increasing to 750 kroner ($106) by 2035 with a floor deduction of 60%. Revenue from the tax collected in 2030 and 2031 will be reinvested into the industry to support its green transition, with the policy's financial framework set for reassessment in 2032.

Minister for the Green Tripartite Jeppe Bruus is pleased that Denmark will be the first country in the world to introduce a CO2 tax on agriculture.

“I will not hesitate to call this a historic result. Danish nature will change in a way we have not seen since the wetlands were drained in 1864. With the new agreement, we will have an ambitious nitrogen effort that will ensure that we get the fish back in our coasts and fjords,” says Bruus.

Emissions from livestock

According to the UN Food and Agriculture Organization (FAO), livestock production was responsible for 14.5% of global greenhouse gas emissions in 2013. However, more recent research suggests that this figure may vary: from 11% to 19%.

The primary sources of livestock emissions are methane from the digestion of ruminants and nitrous oxide from manure management. Experts note that these emissions play a significant role in climate change, making it crucial to focus on reducing them.

Environmental transformation

In addition to the CO2e tax, Denmark has committed to converting 10% of farmland into forests and natural habitats over the next two decades. This includes afforesting 250,000 hectares and restoring 140,000 hectares of low-lying, climate-sensitive land.