Denmark will tax farmers for greenhouse gases emitted by their cows, sheep and pigs from 2030. It is the first country in the world to do so, as it tackles a major source of emissions of methane, one of the most potent gases contributing to global warming.
The aim is to reduce Danish greenhouse gas emissions by 70% compared to 1990 levels by 2030, explained Taxation Minister Jeppe Bruus.
Starting in 2030, Danish livestock farmers will be taxed 300 crowns (US$43) per tonne of carbon dioxide equivalent in 2030. This tax will increase to 750 crowns (US$108) in 2035. However, due to A 60% tax deduction, the real cost per tonne will start at 120 crowns (US$17.3) and increase to 300 crowns in 2035.
Although carbon dioxide usually gets attention for its role in climate change, methane traps about 87 times more heat over a 20-year period, according to the U.S. National Oceanic and Atmospheric Administration.
Levels of methane, which is emitted from sources such as landfills, oil and natural gas systems and livestock, have increased particularly rapidly since 2020. According to the United Nations Environment Program, livestock production is responsible for approximately 32% of human-caused methane emissions.
“We will take a big step towards climate neutrality in 2045,” Bruus said, adding that Denmark “will be the first country in the world to introduce a real CO2 tax in agriculture” and hoping that others countries will follow its example.
New Zealand had passed a similar law which was due to come into force in 2025. However, the legislation was removed from the statute book on Wednesday after heavy criticism from farmers and a change of government in the 2023 election, passing from a center-left bloc to a center-right bloc. New Zealand said it would exclude agriculture from its emissions trading system to explore other ways to reduce methane.
In Denmark, the agreement was reached late Monday between the center-right government and representatives of farmers, industry and unions, among others, and was presented on Tuesday.
Denmark’s move comes after months of protests by European farmers over climate change mitigation measures and regulations that they say are driving them out of business.
The Danish Society for Nature Conservation, Denmark’s largest nature and environmental protection organization, called the tax deal a “historic compromise.”
“We have reached a compromise on the CO2 tax, which lays the foundations for a restructured food industry, including on the other side of 2030,” Maria Reumert Gjerding, president of the company, told the resulting from the negotiations in which it took part.
A typical Danish cow produces 6 metric tons of CO2 equivalent per year. Denmark, which is a major exporter of dairy and pork, will also tax pigs, although cows produce much higher emissions than pigs.
The tax must be approved by the 179-seat Folketing (parliament), but the bill is expected to pass with broad consensus.
According to Danish statistics, the Scandinavian country had, as of June 30, 2022, 1,484,377 cows, a slight decrease compared to the previous year.
