Denmark's Groundbreaking Livestock Emissions Tax: A Global Template for Climate Action?
Source: The DairyNews
In a landmark move, Denmark announced a tax on livestock emissions in late June, positioning itself as the pioneer in this field.
Starting in 2030, Danish farmers will be taxed DKK 300 (approximately $43) for every ton of carbon dioxide (CO2) emitted annually. This tax will increase to DKK 750 per ton by 2035, although a 60% tax deduction will initially reduce the effective rate to DKK 120 per ton in 2030, and DKK 300 from 2035 onwards. The plan also includes incentives for reducing emissions and a transition support fund to aid the agricultural sector's shift towards more sustainable practices.
The tax is a continuation of the CO2 pricing strategy applied to Danish industrial sectors since 2022 and includes methane and nitrogen emissions, gauged by their CO2 equivalent impact. This strategic move is aimed at curbing the significant methane emissions from livestock, which, according to the United Nations, account for 15% of global greenhouse gas emissions annually.
The Danish government anticipates that this tax will catalyze the agricultural sector to explore innovative solutions like modifying cattle feed to reduce methane emissions or reallocating agricultural land for other purposes. Around 400,000 hectares are proposed to be set aside, with plans to establish 250,000 hectares of new forests.
This proposal is pending approval from Denmark’s national parliament, with a decision expected soon. If ratified, the tax is projected to reduce Denmark's greenhouse gas emissions by approximately 1.8 million tons of CO2 by 2030, significantly advancing the country towards its goal of a 70% reduction in emissions from the 1990 base level by 2030.
The tax is a continuation of the CO2 pricing strategy applied to Danish industrial sectors since 2022 and includes methane and nitrogen emissions, gauged by their CO2 equivalent impact. This strategic move is aimed at curbing the significant methane emissions from livestock, which, according to the United Nations, account for 15% of global greenhouse gas emissions annually.
The Danish government anticipates that this tax will catalyze the agricultural sector to explore innovative solutions like modifying cattle feed to reduce methane emissions or reallocating agricultural land for other purposes. Around 400,000 hectares are proposed to be set aside, with plans to establish 250,000 hectares of new forests.
This proposal is pending approval from Denmark’s national parliament, with a decision expected soon. If ratified, the tax is projected to reduce Denmark's greenhouse gas emissions by approximately 1.8 million tons of CO2 by 2030, significantly advancing the country towards its goal of a 70% reduction in emissions from the 1990 base level by 2030.
