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Introducing a Livestock Carbon Emissions Tax in Denmark

Introducing a Livestock Carbon Emissions Tax in Denmark Dairy & Soy Food, ESG, meat Food and Beverage Business

In a groundbreaking move, Denmark is set to introduce the world’s first tax on carbon emissions from livestock farming. Starting in 2030, farmers will face a tax of DKr300 ($43) per ton of carbon dioxide produced annually, with this figure rising to DKr750 per ton by 2035. Despite this, a 60% tax deduction will see farmers pay effectively less initially and in the future.

To support this initiative, the government plans to provide approximately Dkr40bn in subsidies. The tax proposals were recently approved by seven negotiation parties, including key industry stakeholders. The Danish government has been considering this farming emissions tax since February of this year.

The successful implementation of these plans hinges on approval from the national parliament, expected to take place in August. The carbon tax is anticipated to lead to a significant reduction in Denmark’s greenhouse gas emissions by 2030, aligning with the country’s ambitious target to cut emissions by 70% compared to 1990 levels.

Jacob Jensen, Denmark’s Minister for Food, Agriculture, and Fisheries, expressed optimism about the agreement, stating that it marks a new chapter in Danish agricultural history. He emphasized the importance of supporting the country’s skilled farmers and ensuring a sustainable framework for food production.

Finance Minister Nicolai Wammen hailed the tax as a historic moment for Denmark, promoting a transition towards a greener agricultural sector. The move has been lauded by experts internationally, with Mark Howden from the Australian National University praising Denmark’s commitment to reducing emissions from the agri-food sector.

This pioneering tax model could serve as a blueprint for other nations looking to address agricultural emissions. New Zealand also explored a similar approach in 2022, aiming to price farmers for greenhouse gas emissions. While Denmark’s initiative has been met with positivity, New Zealand faced challenges and criticism from the farming community, indicating the complexities of such policies in different contexts.

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