2024: Livestock Emissions Tax

Policy Overview

The Green Tripartite (a partnership of figures from Denmark’s government and leading industry, agriculture, and environmental groups, established with the task of restructuring Denmark's food and agricultural production to reduce the sector’s greenhouse gas emissions) announced its Agreement on a green Denmark in June 2024, which includes a tax on emissions from livestock, including methane -- the first of its kind in Europe. Proposals to the committee by a green tax reform expert group began in February 2024 and included three different tax models ranging from 125 to 750 DKK: cheaper models placed a higher financial burden on the wider Danish society, whereas higher levies corresponded to greater effectiveness in reducing emissions.

The Tripartite decided on a marginal tax rate of 300 Danish kroner (DKK) per metric ton of CO2-equivalent emissions starting in 2030, increasing to 750 DKK in 2035. Phased in with a basic tax floor deduction of 60% to limit the increase in production costs, the levy would effectively start at 120 DKK per ton of CO2-e in 2030, rising to 300 DKK in 2035. Revenues are set to be pooled and returned to the agricultural industry as part of a green transition support scheme. The agreement, which includes other land-based emissions reduction initiatives such as subsidies for reduced fertilizer use and afforestation and rewilding projects, is estimated to reduce 1.8 million tons of CO2-equivalent emissions in 2030, with potential for up to 2.6 million tons.