The world’s first carbon tax on agriculture
Denmark’s legacy as a farming country is evident in both the layout of the land, its institutions, and its culture. Now, a historic tripartite agreement between the Danish government and farming and conservation groups is set to “reorganise and restructure Denmark’s land and food production”.
Concluding five months of negotiations, the world’s first carbon tax on agriculture will define Denmark’s long-term basis for the conversion of agricultural land as well as the transition of food and agricultural production in line with the country’s 2030 target.
The tax entails a fee of DKK 300 (EUR 40.21) per tonne of CO2e on livestock emissions from 2030, rising to DKK 750 (EUR 100,58) in 2035. The package includes a line of built-in incentives for farmers to reduce emissions, and the tax will be phased in with a basic deduction of 60% for at least the first two years.
Overall, efforts and initiatives outlined in the agreement are estimated to reduce Danish emissions by 1.8 million tonnes of CO2e in 2030, thus closing the shortfall concerning the target of reducing national emissions by 70%.
The vision is for Denmark to be an international role model for a holistic and multifunctional approach to land management, where consideration for nature, biodiversity and drinking water go hand in hand with efficient and modern food production.
To drive the transformation, Denmark is establishing a new green fund, which will handle initiatives such as afforestation, extraction of low-lying land and strategic land acquisition. The fund’s activities will include efforts for approximately DKK 40 billion (EUR 5.36 billion)
To learn more about initiatives across the Danish agrifood value chain, check out our white paper describing the ongoing work towards resilient, resource-efficient and decarbonised agrifood systems.
The Danish parliament is expected to vote to approve the tax later this year.
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