Denmark will become the first country in the world to impose a tax on greenhouse gas emissions from livestock, starting in 2030. This tax targets cows, sheep, and pigs, aiming to reduce methane emissions, a potent contributor to global warming. The initiative is part of Denmark’s goal to cut greenhouse gas emissions by 70% from 1990 levels by 2030, according to Taxation Minister Jeppe Bruus.
From 2030, Danish livestock farmers will face a tax of 300 kroner ($43) per ton of carbon dioxide equivalent, which will rise to 750 kroner ($108) by 2035. However, due to a 60% income tax deduction, the effective cost will start at 120 kroner ($17.3) per ton and increase to 300 kroner by 2035.
Methane, which traps about 87 times more heat than carbon dioxide over a 20-year period, is a significant focus of this policy. Livestock contribute about 32% of human-caused methane emissions, according to the U.N. Environment Program. Methane emissions have increased rapidly since 2020 from sources including landfills, oil and natural gas systems, and livestock.
Bruus emphasized that this measure will bring Denmark closer to its goal of becoming climate neutral by 2045. Denmark hopes to set a precedent for other countries to follow.
New Zealand had planned a similar law to take effect in 2025 but retracted it after opposition from farmers and a governmental shift from a center-left to a center-right coalition in the 2023 election. New Zealand now plans to exclude agriculture from its emissions trading scheme and explore other methods to reduce methane emissions.
The Danish government reached this agreement on Monday with representatives from farmers, the industry, and unions. This consensus was presented on Tuesday and has been described as a “historic compromise” by the Danish Society for Nature Conservation. Maria Reumert Gjerding, the organization’s head, highlighted the agreement’s potential to restructure the food industry beyond 2030.
Denmark, a major exporter of dairy and pork, will also tax pigs, although cows are larger methane emitters. A typical Danish cow produces around 6 metric tons (6.6 tons) of CO2 equivalent annually. As of June 30, 2022, Denmark had 1,484,377 cows, a slight decrease from the previous year, according to Statistics Denmark.
The tax proposal is set to be approved by the Danish parliament, the Folketing, where it is expected to pass due to broad-based support.
