Denmark to launch carbon tax on agriculture from 2030

The Denmark coalition government has introduced the world's first carbon emissions tax on agriculture, which will take effect from 2030.

The agreement was reached on 24 June after five months of negotiations between the Government of Denmark, the Danish Agriculture and Food Council, the Danish Society for Nature Conservation, the Confederation of Danish Industry, Danish trade union NNF that organises workers within the domestic slaughterhouse and meat industry, and association Local Government Danish.

Farmers will have to pay 120 Danish kroner/t ($17.30/t) of emitted CO2 equivalent from livestock from 2030, rising to DKr300 from 2035 onwards. Revenues from the tax will be channelled back to the sector and reinvested into green initiatives, climate technology, and production transformation, targeting agricultural sectors facing the most difficulty transitioning, according to the British Agriculture Bureau (BAB).

Copenhagen is a significant exporter of pork and dairy, and agriculture is currently expected to account for 46pc of emissions by 2030. Experts believe the carbon tax will cut these emissions by 1.8mn t in 2030, its first year of operations, enabling Denmark to meet its target of cutting 70pc of its total emissions by that year, according to BAB.

Resistant farmers have brought traffic to a standstill in European capitals several times this year, in protests for EU leaders to remove rules designed to clean up the agriculture sector.

New Zealand in late 2023 delayed the introduction of a proposed tax on cow emissions which was set to start at the end of 2025, but the newly elected New Zealand government in June cancelled the plan to tax livestock producers on methane production. The then New Zealand government had forecast the levy would have reduced the amount of methane released by livestock into the atmosphere by as much as 47pc by 2050, without disclosing the baseline year.

By Jessica Clarke