• Denmark will be the first country to introduce a tax on CO2 emissions from agriculture and livestock farming.
• The measure is the result of a historic agreement between the government, farmers, industry and environmental groups.
• The agreement provides for a tax per tonne of CO2 produced by livestock farming, the use of synthetic chemical fertilisers and other agricultural activities.
• Substantial funds will also be allocated for the restoration of wetlands and forests.

Update of 19 November 2024

On 18 November, the Danish government announced that the country's main parties had reached an agreement on the plan to introduce a tax on emissions from the agricultural sector. This is an important step forward towards the approval of the measure, which will need to be voted on by Parliament.

"Danish nature will change in a way we have never seen since the wetlands were drained in 1864 – said Jeppe Bruus, appointed minister of the Green Tripartite last August –. When travelling through the country, the difference will be visible and felt." According to a report by the Danish Parliament, approximately 60 percent of Denmark's territory is currently under cultivation, a proportion that makes it the country with the highest share of cultivated land, alongside Bangladesh.

The Danish government's decision to tax agricultural emissions

The government of Denmark has announced that from 2030 it will introduce a climate tax on CO2 produced by agriculture, with the aim of helping to reduce greenhouse gas emissions by 70 per cent compared to 1990. The measure, a world first of its kind, will need to be approved by the Danish parliament but, in the meantime, an agreement on its contents has been reached after months of negotiations between farmers, industry, trade unions and environmental groups.

All parties said they were satisfied with the compromise, a historic step towards the protection of biodiversity and the future of agriculture. "We will be the first country in the world to introduce a real CO2 tax in agriculture. Other countries will draw inspiration from this," said Jeppe Bruus, Denmark's Minister of Taxation, who described the measure as a major step towards climate neutrality.

How the tax on emissions from agriculture and livestock farming announced by Denmark works

The agreement provides for a tax, in 2030, of 300 Danish krone (approximately 40 euros) per tonne of CO2 from livestock farming, the use of fertilisers and other agricultural activities, rising to 750 krone (approximately 100 euros) by 2035. To facilitate the transition, for the first five years farmers will be entitled to an income tax deduction of 60 per cent.

The funds to restore wetlands and forests

For the Danish Society for Nature Conservation, this is a "historic" agreement. The tax forms part of a wide-ranging agricultural plan called the Green Tripartite, which also aims to reduce nitrogen emissions by 13,780 tonnes per year from 2027. In addition to the tax, the government will allocate 40 billion Danish krone (over 5 billion euros) to begin "the largest land conversion in the history of Denmark". The funds will be used to restore the country's wetlands, which are important carbon sinks, and to create 250,000 hectares of new forest through the conversion of agricultural land. By 2030, five new large national nature parks will also be established. "We have succeeded in reducing the agricultural area so as to make room for nature, to protect the climate, the environment and our fjords," said association president Maria Gjerding.