Denmark rolls out plans for world’s first carbon tax on livestock

Denmark has announced plans to implement the world's first carbon tax on livestock emissions, starting in 2030.  

Agriculture is the biggest source of emissions for Denmark, which is a major dairy and pork exporter, and the plan is aimed at helping the country meet its climate goals. 

Methane emissions from cows, sheep and pigs will be targeted as part of efforts to reduce greenhouse gas emissions by 70 percent from 1990 levels. 

The tax will start at 300 kroner ($43) per ton of carbon dioxide equivalent in 2030, increasing to 750 kroner ($108) by 2035, with a 60 percent income tax deduction.

Proceeds from the tax will be returned to the industry to support its green transition, the government said. The bill also includes the establishment of more than 600,000 acres of new forest areas. 

Tough negotiations

The plan follows extensive negotiations involving Denmark's centre-right government, farmers, industry representatives and unions.  

“With this agreement, we are investing billions in the biggest transformation of the Danish landscape in recent times,” said Foreign Minister Lars Lokke Rasmussen.  

“At the same time, we will be the first country in the world with a (carbon) tax on agriculture.” 

The plan is expected to be approved by the parliament, reflecting broad-based support despite concerns raised by agricultural groups. 

The dairy sector, a cornerstone of Danish agriculture, has welcomed the agreement while expressing reservations about its potential economic impact on farmers.  

Critics argue that the tax may hinder agricultural investments in sustainability and innovation.