Denmark will tax livestock farmers for the greenhouse gases (GHG) emissions from their cows, sheep and pigs from 2030. While plant-based food advocates have welcomed the move, some organizations believe the climate tax amount could have been higher.

The move follows the Green Tripartite agreement announced in June and negotiations between the country’s major parties, farmers, the industry, trade unios and environmental groups.

From January 1, 2030, farmers will have to pay a levy of 300 kroner (US$43) per metric ton of methane (as per CO2 equivalent) on emissions from livestock, which will increase to 750 kroner (US$105.7) in 2035, according to the agreement.

With this deal, the Northern European country can slash its GHG emissions by 70% by 2030, according to Minister for the Green Tripartite Jeppe Brus.

He said they would “do what it takes to reach our climate goals” after receiving a “broad majority” in parliament. Efforts are now underway to transform huge portions of Denmark’s land from agricultural production to forestry and natural spaces and to restore the region’s fjords.

“A Green Denmark”

Livestock accounts for nearly 32% of human-caused methane emissions, states the UN Environment Program.

Denmark is a huge dairy and pork producer and as of June 2022, it had 1.4 million cows, according to Statistic Denmark. Each cow usually produces about 6 metric tons of CO2 equivalent per year. 

“We will be the first country in the world that introduces a CO2 tax on agriculture,” Climate Minister Lars Aagaard said at a press conference.

The tripartite package of measures — “A Green Denmark,” will include a 60% tax rebate to incentivize farms that achieve low emissions, states a report by the Ministry of New Zealand Foreign Affairs and Trade. The revenue raised will be returned to the agriculture sector through greening initiatives.

The deal also includes NZ$9.5 billion (US$5.5 billion) in government funding for reforestation (250,000 hectares) and peatland recovery (140,000 hectares). Meanwhile, the government will continue focusing on reducing fertilizer/nitrogen use on farms. 

In addition to government funding, industry player Novo Nordisk Foundation has committed an additional DKK 10 billion (NZ$2.4 billion) (US$1.4 billion) to support the government’s plan over ten years. 

Danish-Swedish dairy cooperative Arla is also helping reduce the agriculture sector’s emissions through an incentive program that delivers higher milk prices to its farmers who achieve the best results.

Meanwhile, Danish company Ambient Carbon plans to test a methane-eradicating system it has developed that can “dilute” methane sources like dairy cattle and wastewater treatment, as reported by Food Ingredients First last month.

Tax implementation

The new tax system will be based around two measures — animal head count and emissions per animal, according to the Ministry of New Zealand Foreign Affairs and Trade report.

The tax will apply only to pork and bovine animals, with pigs being categorized as either slaughter pigs, piglets or swine and 15 categories for bovine animals (including breed, milk production capacity etc).

Emissions per animal will be calculated by considering a series of metrics that affect emissions, such as old or new stables, effluent management, days spent outside, how the animals are fed, food composition and the use of climate-friendly technologies. 

At this stage, 15 climate-friendly technologies have been approved for inclusion in the emissions calculation.

Industry reacts

The Danish Society for Nature Conservation has described the tax agreement as “a historic compromise” and believes it lays the groundwork for a restructured food industry, according to its head, Maria Reumert Gjerding.

Meanwhile, global CEO of ProVeg Jasmijn de Boo believes the initiative is “the future of agricultural policy if we seriously want to mitigate the devastating effects of climate change.”  

She urges the EU to adopt measures to tackle emissions reduction in the agricultural sector, “as there currently are none.”

“Animal agriculture is responsible for up to a fifth of global GHG emissions, a fact that has been ignored or sidelined for too long. Further delay in action to reduce emissions from this sector will only worsen the situation for farmers as the climate crisis intensifies,” she adds.

Dutch non-profit foundation True Animal Protein Price (TAPP) Coalition also welcomed the move. 

Jeroom Remmers, director of the TAPP Coalition, says: ”We are pleased that Denmark is setting an example for the world today, during the UN Climate Conference in Baku. This will lead to higher prices for meat and dairy, thereby reducing consumption.”

However, some organizations have expressed their disagreement with the move.

Rune-Christoffer Dragsdahl, secretary-general of the Danish Vegetarian Society, believes the climate tax on livestock must be significantly higher than proposed to counterbalance the many subsidies that favor animal-based foods over plant-based production.

Additionally, Sybille Kyed, policy director of Organic Denmark, an association of organic companies and farmers in the country, believes the Green Tripartite Agreement sidelines organic farming, ignores biodiversity and soil considerations on the majority of Denmark’s land. 

She proposes an approach that integrates CO2e into the European Commission’s Common Agricultural Policy’s (CAP) good agriculture and environmental conditions (GAECs) and eco-scheme system.