World’s first: Denmark to impose greenhouse gas tax on livestock

The Danish government will introduce an emissions tax on livestock farming by 2030, making Denmark the first country in the world to do so. Although New Zealand announced a similar law in 2022, it was withdrawn after widespread farmer protests.

The aim is to make agriculture more sustainable. Denmark is a big dairy and pork producer, and a quarter of Denmark’s greenhouse gas emissions come from agriculture. Methane emitted by cattle and pigs is also the second most important greenhouse gas in the atmosphere.

Around €40 per ton of CO2

Starting in 2030, a tax of 300 kroner, or 40.2 euros, per ton of CO2 equivalent will be levied. By 2035, it will be 750 kroner, or 101 euros. Thanks to a 60% tax deduction, the cost to the livestock farmer will be 120 kroner per ton in 2030 and 300 kroner in 2035.

Methane gas is a much more potent greenhouse gas than CO2: it traps more than 80 times as much heat as CO2 over a 20-year period. However, it disappears from the atmosphere much faster.

A cow emits approximately 334 grams of methane per day. A car produces 175 grams of CO2 equivalents per kilometer. One dairy cow produces as much greenhouse gas daily as a car that travels 40 kilometers.

Making agriculture more sustainable

The measure is part of a broader plan to make agriculture more sustainable. For example, Denmark will also pay farmers 94.5 euros per ton to reduce greenhouse gas emissions from nitrogen fertilization on farmland. This should reduce nitrogen emissions by 13,780 tons per year by 2027.

Nevertheless, the proposal still needs to be voted in in parliament. In a statement, the signatories of the tripartite agreement, which was achieved after months of difficult negotiations, called it “the biggest change in Danish agriculture in more than 100 years.”

It has also been decided that a tenth of agricultural land will be returned to nature. 250,000 hectares of forest, or one billion trees, will be planted, the equivalent of 38 times around the world.

A parliamentary report shows that 60% of Denmark is currently farmland. This makes it the country with the largest share of arable land, along with Bangladesh. The country has also set aside 43 billion kroner (5.7 billion euros) to acquire land from farmers over the next two decades.

Criticism

The agreement is also criticized, even though agriculture would be responsible for 46% of Denmark’s CO2 emissions by 2030 without intervention. Greenpeace, for example, thinks the plans do not go far enough and criticizes its relatively low rate and slow implementation, suggesting that more immediate and higher taxation could better drive the transition to sustainable practices.

Others, in turn, denounce the violation of the polluter pays principle and the shifting of most of the bill onto the taxpayer when Denmark’s 6,000 farmers are already overloaded with subsidies and tax breaks.

Instead, the radical right-wing Danish People’s Party argues that the tax will hurt the economy and does not help the climate “because Danish CO2 emissions are minimal on a global scale.”

Several organizations worldwide have for years been calling for a “fair price” for food or a true-cost approach that includes environmental damage from meat and dairy production. Recent plans to reduce nitrogen emissions for landfarming broke down in the Netherlands and Belgium.

In general, climate change is expected to increase the price of food.