Denmark has introduced the world's first carbon tax on farm emissions, targeting livestock and fertilizers. This historic move aims to reduce agricultural emissions, which account for close to a quarter of the country's total. With tax rates up to US$100 per ton of CO2e, this policy promotes sustainable farming practices and technological innovation. Funds raised will be used to support farmers to decarbonise and for nature restoration.
This is big news because until now agriculture has largely been excluded from carbon taxes or emissions trading schemes globally.
Interestingly, this initiative is modelled after New Zealand's proposed agricultural emissions tax. However, New Zealand recently decided to scrap its plan due to significant backlash from farmers and concerns about economic impacts. The New Zealand government has said instead it will focus on other ways to reduce methane without affecting production or exports.
🔍 Denmark’s implementation of a carbon tax on agriculture underscores the global shift towards stringent environmental regulations. Will other nations follow?
Denmark has introduced the world's first tax on farmers. The tax targets cows, pigs, and fertilizer, and aims to reduce greenhouse gas emissions and promote sustainable farming practices.
Agriculture is Denmark's largest source of emissions (24%). Almost 90% of emissions from agriculture is ultimately a result of cattle and swine breeding.
Denmark has close to 1.5 million cows.
In Denmark, each cow on average produces 5.6 tonnes of CO2e per year.
The cost per tonne of CO2e, will be reduced because of a 60% tax break to farmers.
The annual cost per cow for farmers will be $94 in 2030 and $235 in 2035 (after tax breaks).
The tax is expected to increase the price of meat and dairy products in Denmark by 6%.
The tax is expected to reduce Denmark's emissions by 1.8 million tonnes of CO2e in 2030.
In addition to the tax levy on livestock emissions, Denmark's agricultural plan includes several other significant initiatives:
Land Conversion: The plan allocates US$2.8 billion to convert 15% of Danish agricultural land into forests and nature areas, creating 250,000 hectares of new forests by 2045
Biochar Subsidy Scheme: Worth over US$940 million until 2045, this scheme supports the production of biochar through pyrolysis for carbon storage
Expansion of Protected Areas: The government aims to protect at least 20% of nature, establishing a minimum of 80,000 hectares of private untouched forest and 20,000 hectares of state forest
Comments