Denmark is set to introduce the world’s first carbon tax on livestock, charging dairy farmers about $96 per cow starting in 2030 to reduce methane emissions. This bold move aims to help the country meet its climate goals by tackling agriculture, the biggest source of emissions in Denmark. While the government plans to invest billions in environmental projects, farmers are upset and fear the financial burden will hurt their livelihoods. Protests are likely as tensions rise between climate initiatives and agricultural interests!

Denmark’s dairy farmers are required to pay an annual tax of 672 kroner ($96) per cow for the emissions they produce that warm the earth.

This week, the coalition administration of the nation decided to impose the first carbon emissions tax on farmers worldwide. It will entail new cattle taxes beginning in 2030 reports CNN.

Denmark exports a lot of pork and dairy products, and the majority of its emissions come from the agricultural sector. The coalition agreement aims to assist the nation in meeting its climate targets. It also calls for investing 40 billion krone ($3.7 billion) in initiatives like reforestation and the establishment of wetlands.

Foreign Minister Lars Lokke Rasmussen said in a statement on Tuesday that “with today’s agreement, we are investing billions in the biggest transformation of the Danish landscape in recent times.” “At the same time, we will be the first country in the world with a (carbon) tax on agriculture.”

Although the agreement and its objectives were mostly welcomed by the Danish dairy industry, some farmers are upset about it.

The action was taken only a few months after farmers staged protests throughout Europe, using tractors to block highways and throwing eggs at the European Parliament in response to a litany of grievances, including environmental regulations and undue red tape.

Approximately one-third of greenhouse gas emissions are caused by the global food system, which is a major contributor to the climate issue.

Approximately 12% of global emissions in 2015 came from livestock farming, which has a significant impact, according to the Food and Agriculture Organization of the United Nations. Methane, a powerful gas that warms the globe, is released by cows and some other animals through their burps and manure, and it accounts for a portion of this pollution.

Minimizing livestock emissions

The tax, which is anticipated to be adopted by the Danish parliament later this year, will start in 2030 and increase to 750 kronere ($107) in 2035 per tonne (1.1 ton) of CO2-equivalent emissions from cattle.

Farmers will essentially be charged 120 krone ($17) per tonne of animal emissions annually starting in 2030, with the tax credit of 60% applying. This will increase to 300 krone ($43) in 2035.

Concito, a Danish environmental think tank, estimates that dairy cows, which make up the majority of the country’s bovine herd, produce 5.6 tons of CO2 equivalent annually on average. A fee of 672 krone, or $96 per cow, is incurred when the reduced tax rate of 120 krone is applied.

This tax relief will cause the charge to increase to 1,680 krone ($241) per cow in 2035.

The agricultural industry’s green transition will be aided by the tax’s first two years’ profits before it is reevaluated.

According to Torsten Hasforth, head economist of Concito, “the whole point of the tax is to get the sector to look for solutions to reduce emissions,” CNN reported. Farmers may, for instance, alter the feed they employ.

However, the Baeredygtigt Landbrug organization of Danish farmers claimed that the actions amounted to a “scary experiment.”

“We believe that the agreement is pure bureaucracy,” chairman Peter Kiær said in a statement. “We recognize that there is a climate problem… But we do not believe that this agreement will solve the problems because it will put a spoke in the wheel of agriculture’s green investments.”

The CEO of Arla Foods, the biggest dairy company in Europe, Peder Tuborgh, called the agreement “positive,” but he said that farmers who “genuinely do everything they can to reduce emissions” shouldn’t have to pay a tax.

“It is essential that the tax base for a (carbon) tax is solely based on emissions for which there are means to eliminate (them),” he added in a statement.

The CEO of DLG Group, a cooperative owned by 25,000 Danish farmers and one of the largest agricultural firms in Europe, Kristian Hundeboll, stated that the tax’s “anchoring” in EU law was “crucial for competitiveness.” “Neither the climate, agriculture nor the ancillary industries benefit from Denmark acting unilaterally,” he said.

GreatGameInternational recently reported that Lufthansa, Europe’s largest airline group, is adding an environmental surcharge of up to $77 per flight starting in 2025 to help cover the rising costs of sustainable aviation fuel and meet new regulatory requirements.