Denmark is the first country in the world to introduce carbon tax on livestock farming
Denmark is the first country in the world to introduce carbon tax on livestock farming

Insight

Denmark is the first country in the world to introduce carbon tax on livestock farming

Insight

Denmark is the first country in the world to introduce carbon tax on livestock farming

To accelerate the green transition in farming and food production and supporting Denmark in reaching the nation’s ambitious climate goals, a historic “Agreement on a Green Denmark” has been concluded. This agreement is a crucial piece for Denmark to meet its 2030 climate target of a 70% reduction in greenhouse emissions as well as to protect nature, biodiversity, the aquatic environment and potable water in Denmark. 

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True to the Danish tradition of private-public partnerships and collaboration, the government, alongside the Danish Agriculture and Food Council, the Danish Society for Nature Conservation, several trade unions, the employers' organisation Danish Industry, and Local Government Denmark, has taken a significant step towards carbon-neutral food and agriculture by implementing tax on livestock emissions and converting agricultural land to nature. 

 

To support farmers and the agricultural industry in this important transition, funding has been allocated to develop and invest in new technology. The agreement specifically provides for funding of DKK 10 billion for the production and storage of biochar through pyrolysis and other funding opportunities are expected to materialise. 

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Facts about the agreement

  • Introduction of a CO2e tax on emissions from livestock. A fee of DKK 300 per ton CO2e in 2030 increasing to DKK 750 per tonnes of CO2e in 2035 with a deduction of 60%

  • Reductions in greenhouse gas emissions of 1.8 million tons of CO2e in 2030 with the potential of up to 2.6 million tons

  • Proceeds to be returned to the industry in the form of a Transition Support Pool to support the green transition of the industry 

  • Establishment of a new Green Acreage Fund of DKK 40 billion to support afforestation, extraction of carbonaceous lowland soils, and investments in green initiatives and technology 

  • Afforestation of 250,000 hectares

  • Extraction of 140,000 hectares of carbonaceous lowland soils incl. peripheral areas

Today, agricultural production takes up two-thirds of the total Danish land area and with the agreement, this area will be significantly reduced to allow more room for nature and forests to the benefit of the environment. The taxes levied on livestock farming is expected to reduce the total emission of CO2e by 1.8-2.6 million tons per year by 2030. 

"With today's agreement, we are investing billions in the largest transformation of the Danish landscape in modern times. We are creating much more nature, cleaner aquatic environments, planting more forests, and enabling the development of agriculture for the future green competition. At the same time, we are becoming the first country in the world with a CO2 tax on agriculture."

Lars Løkke Rasmussen

Foreign Minister of Denmark

Get in touch

Want to learn more about the new carbon tax on agriculture in Denmark?

Invest in Denmark provides free-of-charge confidential and tailor-made solutions for foreign companies looking to set up a new business in Denmark or expand an existing one. Please contact one of our experts here:

Copenhagen

  • Sarina Lohmann

    Title: Special Advisor – Maritime and transport – Analysis & Partnerships

    Area: Copenhagen

    Phone: +4533920423

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