DENMARK

Denmark’s radical methane tax hits farmers

After months of negotiations with farmers and livestock farming organisations, the Danish government will introduce Europe’s first carbon tax on agriculture.

Posted on Jul 11 ,00:05

Denmark, a major exporter of pork and dairy products, will charge farmers for their livestock emissions starting in 2030. The Nordic country will be the first to tax livestock emissions to reduce methane emissions: 120 Danish kroner (about €16) per tonne of CO2 emissions will be charged to begin with, going up to 300 Danish kroner (about €40) in 2035. According to the government, this environmental reform aims to reduce Danish emissions by 1.8 million tonnes of CO2 in 2030, closing the gap towards the 2030 climate target.

Danish meat has been considered by many as some of the world’s best, resulting from highly efficient and sustainable farming practices in Europe. However, Danish politicians are apparently unaware that methane emissions from sources such as landfills and oil and natural gas systems are higher than those from livestock. The press has quoted Foreign Minister Lars Lokke Rasmussen as saying: “With today’s agreement, we will be the first country in the world to introduce a real tax on CO2 in agriculture.” And Nicolai Wammen, the country’s finance minister is reported to have said: "We are investing in the future of our agricultural sector, starting a transition with shared ambitions and goals, and laying the foundations for what our country will look like in five, ten- and twenty years. We know that a carbon tax model that covers all sectors offers us the lowest overall social cost. What we have done now, from industry to agriculture, shows us that an ambitious green transition is possible".

Stephanie Lose, economy minister, has also added: "With the Green tripartite agreement, we set a clear green direction for the future of Danish agriculture. We create a framework for a more sustainable, high-tech and efficient agricultural production, which ensures a green transition. It has not been an easy task, but I am proud that we have once again shown that we in Denmark can sit down and listen to each other and together find solutions to the great challenges facing our good country. I would like to thank the parties in the green tripartite for their great work, seriousness and trusting cooperation over the past many months. This has created the foundation for us to ultimately succeed in making an agreement that all parties can see themselves in".

A Greenpeace spokesman is quoted as remarking that although the new deal is “far from perfect”, it is a "world-first" CO2 emissions tax on agriculture, and its meaning should be recognised as a "significant milestone". Martin Damm, the National Association of Municipalities chairman, said that the agreement is ambitious, and that municipalities were ready to take the lead. He noted that municipalities know the landowners and the local conditions best, and that is was their task to be responsible for the local transformation, and ensure there is room for both agriculture and nature.

Denmark is not the first to take the route of taxing livestock emissions as in 2022 New Zealand unveiled a strategy to curb greenhouse gases and transition to a low-emissions future in an emissions reduction plan, but a change in government soon scrapped the so-called burp tax. Ireland has also debated a tax and but has so far just developed the Agriculture Navigator (AgNav) platform, which aims to guide Irish farmers towards emissions reductions efforts by helping them collect specific emissions data from their farms.

What remains to be seen is how farmers, protagonists of lively tractor protests across Europe, will react. As reported by CNN, Danish farmers’ association Bæredygtigt Landbrug said the measures amounted to a "frightening experiment". "We recognise that there is a climate problem… But we don’t think this agreement will solve the problems, because it will throw a spanner in the works".

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