Denmark’s groundbreaking initiative to impose a tax on agricultural emissions, specifically targeting livestock, has received parliamentary approval.
The Green Tripartite Agreement, which has been in development for nearly a year and was first announced in June, finally gained traction after extensive discussions among the nation’s leading political parties, agricultural representatives, and environmental advocates. This marks Denmark as the first country globally to implement such a tax, with projections indicating a potential reduction of between 1.8 million and 2.6 million tonnes of CO2 equivalents by 2030 when the new tax comes into effect.
A primary focus of this initiative is land conversion. The strategy aims to transition vast areas of farmland into forestry, aligning with the objectives of the Green Deal. Significant portions of agricultural land will be taken out of service, with transformation efforts set to commence in 2027. According to a parliamentary report, approximately 60% of Denmark’s land is currently cultivated, making it one of the nations with the highest proportion of arable land.
The land conversion plan will lead to the establishment of six new national parks by the end of 2030, enhancing Denmark’s commitment to environmental sustainability.
Starting in 2025, farmers will face a levy of DKr 300 ($43) per tonne of methane emitted (adjusted to CO2 equivalents), which is expected to climb to DKr 750 by 2035. To ease this transition, the government aims to introduce subsidies as part of a supportive economic framework.
Jeppe Bruus, Minister for the Green Tripartite, emphasized the historic nature of this agreement. “I would not hesitate to call this a historic result. With the agreement, we are now allocating DKr 43 billion to carry out an enormous restructuring of Denmark’s land area,” he stated. Bruus added, “Danish nature will change in a way we have not seen since the wetlands were drained in 1864. Denmark will be the first country in the world to introduce a CO2e tax on agriculture.”
Despite the significant changes, the Ministry reassured that agriculture remains vital to Denmark’s economy. It stated, “The conversion of the Danish agricultural and food industry must take place in a way that supports an increasingly sustainable, high-tech, and area-efficient agricultural production. This ensures that Denmark retains a competitive industry with attractive business potential and job opportunities in the future.”
Moreover, the agreement actively promotes plant-based foods by allocating an additional DKr 420 million for the Plant-Based Food Grant between 2025 and 2030. This initiative has garnered positive feedback from organizations like ProVeg. CEO Jasmijn de Boo remarked, “Animal agriculture is responsible for up to a fifth of global greenhouse gas emissions, a fact that has been ignored or sidelined for too long. Further delay in action to reduce emissions from this sector will only worsen the situation for farmers as the climate crisis intensifies.”
As we observe these changes, it becomes clear that Denmark is setting a precedent for the food and beverage industry trends, aiming to pave the way for improved sustainability and innovative practices in the food and drink business. Keeping an eye on food and drink consumer trends will be imperative for stakeholders navigating this transformative landscape.
