DENMARK – Denmark is set to become the first country to impose a tax on carbon dioxide emissions from livestock, aiming to inspire global efforts in combating climate change.
Starting in 2030, this pioneering policy targets the nation’s largest source of CO2 emissions, with the goal of significantly reducing greenhouse gases.
This initiative stems from recommendations made in February by experts tasked with helping Denmark achieve its ambitious goal of cutting emissions by 70% from 1990 levels by 2030.
Following extensive negotiations, a consensus was reached late Monday between the centrist government, farmers, industry representatives, labor unions, and environmental advocates.
Taxation Minister Jeppe Bruus of the Social Democrats highlighted the significance of this policy, stating, “We will be the first country in the world to introduce a real CO2 tax on agriculture. Other countries will be inspired by this.”
Despite requiring parliamentary approval, the widespread support suggests the bill is likely to pass.
The proposed tax plan sets a fee of 300 Danish crowns (US$43.16) per tonne of CO2 emissions by 2030.
To mitigate the financial impact on farmers, they will receive a 60% income tax deduction, effectively reducing the cost to 120 crowns per tonne initially and 300 crowns by 2035.
Additionally, subsidies will be available to aid farmers in adapting their operations.
Minister for Economic Affairs Stephanie Lose illustrated the tax’s potential impact, noting it could raise the price of minced beef by 2 crowns (US$0.29) per kilo by 2030.
Currently, minced beef sells for around 70 crowns (US$10.04) per kilo in Danish discount stores.
While similar measures faced pushback in New Zealand, leading to the abandonment of a comparable tax plan, Danish farmers have acknowledged the compromise as a workable solution.
Despite initial concerns about reduced production and job losses, the agreement provides clarity and stability for the agricultural sector.
The L&F agriculture industry group expressed relief, stating, “The agreement brings clarity when it comes to significant parts of the farmers’ conditions.”
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE
