By Faridat Salifu
Denmark is set to introduce the world’s first carbon tax on agriculture, with cattle farmers facing an annual charge of nearly €100 per cow to account for greenhouse gas emissions.
After months of intense negotiations with trade bodies and environmental groups, Denmark’s ruling coalition agreed recently to an effective tax rate of DKr120 (€16) per tonne of carbon dioxide equivalent emissions from livestock, including cows and pigs.
The agreement aims to introduce the tax by 2030. This decision follows recent protests by farmers across Europe against EU environmental measures.
Prime Minister Mette Frederiksen expressed hope that the tax would “pave the way forward regionally and globally” for similar initiatives.
The Danish parliament is expected to vote on the tax later this year. The tax rate is set to start at DKr300 per tonne of CO₂ equivalent in 2030, increasing to DKr750 per tonne by 2035. Incentives for farmers to reduce emissions will be built into the system, and a basic tax deduction of 60% will apply for at least the first two years.
According to Green think-tank Concito, the average Danish cow produces six tonnes of CO₂ equivalent per year. Under the initial tax rate of DKr120, this would result in a charge of approximately DKr720, or €96.50 per cow.
The tax will also affect pig farmers, although cows produce significantly higher emissions. Denmark is a major exporter of dairy and pork products.
Farmers’ organization Bæredygtigt Landbrug, which was not involved in the negotiations, criticized the agreement.
Chair Peter Kiær argued that the tax would stifle technological investment in Denmark, already one of the world’s greenest agricultural producers. “I think it’s crazy,” Kiær said adding that the government] aren’t listening to the farmers.
Some environmental groups also argued that the tax included too many deductions to be effective.
The nation’s Climate Minister, Lars Aagaard, emphasized the necessity of the tax, noting that agriculture is Denmark’s largest greenhouse gas emitter.
“This cannot continue,” he said. “Agriculture must contribute and be part of the green future.”
Søren Søndergaard, chair of the Danish Agriculture & Food Council, highlighted the success in securing a tax model that allows farmers using approved, sustainable climate solutions to avoid the tax entirely.
However, Peder Tuborgh, CEO of dairy cooperative Arla Foods, warned that the tax regime might unfairly impact farmers, including organic producers, who are already making efforts to reduce emissions. He called for further examination by policymakers.
It was recalled that New Zealand recently scrapped a similar tax on sheep and cow farmers aimed at reducing methane emissions.
Meanwhile, the European Commission is exploring the possibility of an EU-wide agricultural emissions trading system, which might require farmers and landowners to pay directly for their emissions.
Kristian Hundebøll, CEO of DLG Group, one of Europe’s largest agribusinesses, emphasized the importance of anchoring the tax in Europe rather than Denmark acting unilaterally.
Alexandre Paquot, deputy director-general of the European Commission’s climate arm, recently indicated that integrating agriculture into the bloc’s emissions trading system could offer “new business cases and new opportunities for farmers.”
Agriculture accounts for nearly a quarter of global emissions, including land use changes.
Ruminant animals such as cows and sheep produce methane through digestion, and synthetic nitrogen fertilizers in their feed also contribute to greenhouse gases.
Livestock emissions make up 11% of global emissions, with cows responsible for nearly two-thirds of that total.