Denmark is set to introduce a carbon tax on agriculture emissions starting in 2030. As part of an agreement reached on Monday and expected to be approved by the Danish parliament in August, farmers will initially pay 120 Danish kroner (€16) per ton of CO2 equivalent (CO2e), increasing to 300 kroner (€40) per ton by 2035. Agriculture, projected to contribute 46% of Denmark's emissions by 2030, will see a 1.8 million-ton reduction in CO2e in the first year of the tax’s implementation.

Key elements of the proposal include:

  1. CO2e Tax: A tax of 120 DKK per ton of CO2e from 2030, rising to 300 DKK in 2035.
  2. Emission Reductions: Aiming to cut 1.8 million tons of CO2e by 2030.
  3. Funds for Industry Transition: Proceeds from the tax will be used to support the agricultural sector in its green transition, with a review set for 2032.
  4. Forest Creation: Establishment of 250,000 new hectares of forest.
  5. Protected Nature: Aiming for at least 20% protected nature, including 80,000 hectares of private untouched forest and 20,000 hectares of state forest.
  6. Biochar Subsidy: A 10 billion DKK subsidy scheme for biochar storage through pyrolysis until 2045.
  7. Slaughterhouse Fees and Labor Upskilling: Increased fees for slaughterhouses and funds for labor skill development from 2027-2030.

This initiative follows similar environmental policies but contrasts with New Zealand, which recently scrapped a comparable livestock emissions tax. Major Danish stakeholders and international observers have lauded the compromise as a significant step towards a greener agricultural sector, with potential global implications.

Finance Minister Nicolai Wammen described this move as "truly historic" for Denmark's climate, nature, and agricultural future.