Denmark, a major pork and dairy exporter, has announced that it will be the first country in the world to introduce a tax on livestock carbon dioxide emissions starting from 2030. This move is part of the country’s efforts to reach its legally binding target of cutting greenhouse gas emissions by 70% from 1990 levels by 2030.
The centrist government in Denmark has reached a wide-ranging compromise with farmers, industry, labor unions, and environmental groups on this policy linked to the farming sector, which is the country’s largest source of CO2 emissions.
Under the plan, farmers will be taxed 300 Danish crowns ($43.16) per tonne of CO2 in 2030, increasing to 750 crowns by 2035. However, farmers will be entitled to a 60% income tax deduction, meaning the actual cost per tonne will start at 120 crowns and increase to 300 crowns by 2035. Subsidies will also be made available to support adjustments in farm operations.
The tax could add an extra cost of 2 crowns per kilo (2.2 pounds) of minced beef in 2030, according to the Minister for Economic Affairs Stephanie Lose.
While Danish farmers had expressed concerns that the country’s climate goals could force them to lower production and cut jobs, they have stated that the compromise reached makes it possible for them to maintain their business.
According to Taxation Minister Jeppe Bruus of the center-left Social Democrats, Denmark will be the first country in the world to introduce a “real CO2 tax on agriculture” and hopes to inspire other countries to follow suit.