Denmark introduces carbon tax on agriculture

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Denmark will become the first country to introduce a carbon tax on agriculture, which includes cows, pigs, and sheep.
denmark carbon tax

Denmark’s Government has agreed to introduce a carbon tax from 2030. It’s part of the country’s aim to reduce greenhouse gas emissions by 70% from 1990 levels by 2030.

It means Denmark will become the first country to introduce a tax on agriculture, which includes cows, pigs, and sheep.

From 2030, farmers will be taxed 300 kroner ($AU65) for every tonne of CO₂ emitted by livestock. This will gradually increase to 750 kroner ($AU160) by 2035.

Background

A carbon tax refers to taxing companies on the amount of greenhouse gases produced. It is aimed at encouraging companies to adopt more carbon-efficient processes and to produce less pollution in their operations.

Carbon taxes can apply to agriculture, coal, oil, and gas industries.

Denmark’s tax

In addition to a tax on livestock, Denmark is introducing carbon taxes on other aspects of the agriculture industry — one coming into effect as soon as 2027.

The Danish Government will increase taxes on fluorinated gas (F-gas) emissions from 2027. F-gases are human-made greenhouse gases, commonly produced by appliances like fridges and air cons.

In 2028, Denmark also plans to introduce a 40 kroner ($AU9) per tonne tax on carbon-rich agricultural land, to encourage land owners to begin extracting carbon from their land.

Response

Peder Tuborgh, CEO of major European dairy brand Arla Foods, said that farmers are “already engaged in the green transition”. He added that farmers “should not be economically penalised if they take the right measures” to reduce carbon emissions.

Tuborgh also called for a further examination of how the carbon tax would impact organic farmers who may not be able to reduce emissions as effectively.

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