Denmark introduces a CO2e-tax on agriculture
A historic agreement will ensure that Denmark is the first country in the world to introduce a CO2e tax on animal products
A Green Denmark – was reached on 24 June 2024 and is an important milestone in the food cluster’s vision to achieve a carbon neutral food industry by 2050.
To accelerate the green transition in farming and food production and support Denmark in reaching its ambitious climate goals, a historic agreement “A Green Denmark” has been reached. This agreement is crucial if Denmark is to meet its 2030 climate target of a 70% reduction in greenhouse emissions as well as protect nature, biodiversity, the aquatic environment and ensure potable water.
A broad spectrum of interests were involved in the month-long negotiations. The so-called multi-stakeholder approach included private organisations, public bodies and government ministries.
This has ensured that the agreement is founded on compromise, which, in turn, has ensured that the industry itself has been able to present solutions and play a key role in defining the framework for Danish agriculture and Danish food production for the years ahead. The agreement comes into force in 2030 which means that the parties in question will have time to adjust to the new requirements and optimise production with a focus on the climate.
A tax of around DKK 300 per tonne is planned to take effect from 2030, increasing to DKK 750 in 2034. A basic deduction of 60 per cent will be applied to the average emissions from different types of livestock. Climate-efficient farmers will therefore have an economic advantage.
Challenges to come – a balance between the environment, climate, nature & production
Among the key elements of the agreement is a locally based approach to land management, a landscape fund of approx. DKK 40 billion, a structure for faster approval of various measures, a CO2e tax on agriculture, a new approach to the aquatic environment and more forests, nature and biodiversity. The agreement also emphasises generational change, competitiveness and an international outlook.
The agreement also reflects the wish of the parties to raise the sustainability agenda at international level. This is essential if Danish agriculture is to develop and inspire the rest of the world with green solutions. The agreement stipulates, for example, that efforts should be made towards a pan-European regulation of agricultural emissions, to the greatest possible extent through allowance trading (ETS). If overall carbon regulation of the agricultural sector takes place at EU level, the national regulation will be adapted.
New ministry for a green Denmark
A historic agreement that points the way for future food production and a new and greener Denmark map has thus been adopted. On 28 August, the Government announced the creation of the Ministry for the Green Tripartite with Jeppe Bruus as Minister. The minister also gets a seat on the government's green committee and will join the finance minister and other ministers for green affairs.
“The Danish Agriculture & Food Council looks forward to working with the new minister, particularly with a view to ensuring that we get less and not more bureaucracy,” says Søren Søndergaard, Chairman of the Danish Agriculture & Food Council.
True to the Danish tradition of private-public partnerships and collaboration, the government, alongside the Danish Agriculture and Food Council, the Danish Society for Nature Conservation, several trade unions, the Confederation of Danish Industry, and the Danish Local Government Association, has taken a significant step towards carbon-neutral food and agriculture by implementing a tax on livestock emissions and converting agricultural land to nature.
A Green Denmark - the next steps:
- The Green agreement still needs to be approved by the Danish Parliament
- Farmers and the food industry can now make investment plans in line with the Green agreement
- Implementation of the many elements will be complicated – but will largely be based on voluntary participation and compensation
- Involvement of local and regional organisations and authorities will ensure better implementation
- Ongoing focus on R&D, financing and viable food production