Denmark introduces a carbon tax on agriculture

Source : Vegconomist

 From Vegconomist

Denmark looks set to introduce what is claimed to be the world’s first carbon tax on agriculture, following negotiations between the government, farmer organisations, trade unions, industry, and environmental NGOs.

The agreement is expected to be formally approved by the Danish parliament in August, and will see a tax of DKK 300 per tonne CO2e introduced on livestock emissions from 2030. This will rise to DKK 750 per tonne CO2e in 2035, but with a basic deduction of 60%; this means that the effective tax will be DKK 120 (€16) per tonne in 2030 and DKK 300 (€40) per tonne in 2035.

“We are investing in the future of our agricultural sector”

The proceeds raised by the tax in 2030-31 will be returned to the industry as a support fund to aid the green transition. The tax is expected to reduce emissions by 1.8 million tonnes of CO2e by 2030, enabling Denmark to achieve its legally binding target of cutting emissions by 70%.

Additionally, 250,000 new hectares of forest will be established in the coming years, and targets have been set to protect at least 20% of nature. Fees for slaughterhouses will be raised by DKK 45 million (€6 million) annually from 2029, and funding will be allocated to upskill labour.

The agreement has been reached despite Europe-wide backlash from farmers against proposed EU environmental policies, which led to some targets being dropped earlier this year. New Zealand has also recently scrapped plans for a tax aimed at tackling livestock emissions.

With the new tax, Denmark continues on its trajectory of progressive agricultural policies. In 2021, the country allocated 580 million DKK to farmers who produce plant-based foods; this was said to be the first time in history that plant foods had been given priority in an agricultural agreement.

In October 2023, Denmark became the first country worldwide to publish a national action plan for plant-based foods. The plan aims to strengthen and promote the country’s plant-based sector as part of the shift toward climate-friendly diets. Its publication came just a few months after a report found that Denmark’s financial sector currently lacks the objectives, knowledge, and ambition to invest in sustainable foods.

In March of last year, the Danish Climate Council recommended that two-thirds of the meat consumed by Danes should be replaced by plant-based foods, and suggested that high-emission foods such as beef should be taxed.

Beef and mutton produce the most methane in agriculture, and methane is 80 times as potent a greenhouse gas over 10 years as CO2 (it takes 12 years for methane to decay into CO2).  Also, expanding beef production means more land clearing, though obviously not in Denmark.  Globally, these two factors make agriculture a major source of greenhouse gases.  In 2024, 88% of Denmark's electricity came from renewables.   And 56% of Denmark's car sales are EVs/PHEVs.   Agriculture is the logical next step to cut emissions.  Heat pumps are another.  Compared to the rest of Scandinavia and Europe, Denmark has fewer heat pumps installed per 100,000 people, partly because its heat pump subsidies are smaller.  Heat pumps are far more efficient for heating in terms of energy use than old-fashioned gas or oil boilers.

Is there any hope at all?

There are some extraordinary things happening in the renewables space.

1. Solar power is up a lot (it varies by country) almost everywhere.  The cost of solar continues to decline, and because the cost of storage is plunging, "firming" solar electricity is becoming easier and cheaper.

2. CATL has introduced improved sodium-ion batteries. Sodium is roughly 1/5th as costly as lithium, so sodium-ion batteries will be much cheaper than lithium-ion. They also have a much longer life, theoretically allowing cars to travel 3 million miles before the batteries wear out. These new batteries will have 10,000 cycles, which will mean that even if they are charged and discharged 100% every day, they will still last 27 years.  Fantastic for stationary (grid) storage.  

3. EVs continue to make up an ever larger proportion of total car sales. In China, 1/3rd of the world's car market, they are +-50%, heading straight towards 100%. EVs (from China) now have the same sticker price as petrol cars. For example, here in Oz, the cheapest BYD Dolphin costs the same as the cheapest petrol Toyota Corolla. As battery prices plunge, EVs are only going to become ever more attractive.


Emissions from land transport and electricity generation are just under 50% of total global emissions. It seems plausible that these will have nearly ended by 2040, putting us halfway down the road to zero emissions. We need to do more (stop eating red meat, replace gas/oil heating with heat pumps/electrical heating, fix cement, steel and air travel, stop land clearing) to bend that curve towards a better outcome, but for the first time in years, I feel optimistic that we at last have a chance of avoiding catastrophic climate change.  

What can you do to help?  You can cut your personal emissions, by as much as 20-30%, by becoming vegetarian, or at least, stopping eating beef and mutton, and not using milk.   If mankind did that, we would cut emissions by +-70%, adding together the decline in emissions from agriculture and transport and electricity generation.  The more we cut emissions, the sooner temperatures will stop rising.

It has been possible to argue that anything we do is pointless, because China's emissions have just kept on rising.  But this year, or next, China's emissions, as the country installs more and more solar, and EV sales continue to explode, will peak and start falling, and that particular excuse for inaction will disappear.

Let's do this.  

Greenhouse gas emissions per 1000 calories

 Here, I talked about greenhouse gas emissions per kilogram.  This chart shows greenhouse gas emissions per 1000 calories.  The chart is from Our World in Data.

The conclusion is the same:  even without becoming fully vegetarian, by avoiding beef, fish, lamb and mutton, you could significantly cut your emissions from food, which makes up ~30% of total greenhouse gas emissions.  Becoming fully vegetarian would cut your emissions even more.  And becoming vegan would be even better.  Don't say tofu is just as bad as beef---in the chart from my previous post, tofu produces 3.2 kilograms of CO2-equivalent per kilogram vs beef's 99 kg CO2-equivalent.

Purity is not essential.  Going from eating meat three times a day to once a day reduces your emissions and animal suffering and forest clearing.  Eating meat once a week instead of once a day, ditto.  You get the picture.

Not eating meat is something we can do personally, individually.  So is buying our electricity from a green supplier* and driving a hybrid or EV.  Together, taking these steps could reduce your emissions by ~70%.  

* Many so-called "green" electricity providers use carbon offsets to "reduce" the carbon emissions produced by burning fossil fuels to generate their electricity.  Most carbon offsets have turned out not to reduce emissions, i.e., to be fake, and many of them are out-and-out scams.  Choose a provider that generates all its electricity from its own wind, solar, nuclear, hydro or wave/tidal electricity, or from contracts it has with wind and solar farms.