The Danish carbon tax on livestock has had a more difficult birth than a purebred Belgian blue calf.

Over the last decade numerous reports and studies funded by the Danish government have proposed everything from a meat tax on products sold to consumers to direct taxation.

Ultimately the Danish government’s plan for a €100 / cow tax is not exactly groundbreaking because it is not the first country to push through a government effort to place a price on agricultural greenhouse gas emissions.

That honour goes to New Zealand/Aotearoa who initially proposed taxing cow methane only for it to be rolled back following government change.

As in Ireland however both countries are concerned about not only greenhouse gas (GHG) emissions but also water quality and in particular nitrates concentrations.

In Denmark there is now an extensive plan to address agriculture’s environmental impact and water quality features heavily with a particular focus on parts of the country with higher concentrations of nitrogen in water.

Danish water quality has been a long standing and much more severe issue than it is in Ireland., because as far back 2020 not a single monitored river had a nitrates concentration of less than 0.8mg/l – while Ireland currently has 38% of our rivers at that status.

Cattle tax

Though many in Ireland would expect the idea of a tax on cattle emissions as the policy of a green party in government, this is not the case with neither of Denmark’s green parties involved in the current ruling coalition.

More surprisingly, the government that has proposed this is made up of three centrist parties including the largest center-right coalition party – Venstre – who previously received widespread support from an estimated 29,554 Danish farmers.

Following internal disputes within the former agrarian party a ‘green tripartite’ was established to address the fact that emissions from Danish agriculture had not reduced for ten years.

This green tripartite contained several ministers, along with representatives from farming and environmentalist organisations. The outcome of this unique group was a strategy named Agreement on a Green Denmark with many elements familiar to European farmers.

Aside from the cow tax, due to start with a phase in from 2030 at 120 Danish Krone (DKK) or €16 per tonne of CO2 equivalent to it’s eventual price of 300 DKK (€40 approx) per tonne, the Danish government has some other big plans.

Peatland tax

Along with a tax on cow emissions, many farmers on peat type lowland soils will face a similar tax and in many areas with high nitrogen will be offered buy-outs to relocate their farms, similar to what we have seen offered in the Netherlands.

The government has also promised 40 billion DKK (in the region of €5.36 billion) to support planting 250,000 hectares of forest on agricultural land triple the current rate of afforestation.

However not all of this will be timber or biomass, 100,000 hectares cannot be used for forestry operations instead leaving trees unharvested, 80,000 by private owners and 20,000 by state entities.

Other elements read even more extreme to an Irish eye including removing 140,000 hectares of farmland on peat and drained wetland from agriculture entirely.

Should farmers on high carbon lowland peat type soils be unwilling to participate in essentially abandonment of their land, or “phase out” as described in the document, then they can expect to pay a tax of €5.36/tonne of carbon.

Emissions

Given the reported emissions from farmed peat soils in 2018 was approximately 28t/ha this would mean every hectare would cost a farmer €150/year.

If this tax is deemed not to have been effective in reducing farming on high organic matter soils they will be reviewed in 2027 with the potential to increase taxation further.

It is hard to imagine such a massive move as removing 15% of agricultural land from production along with a potential climate charge of €100 per cow being welcomed by Irish farm organisations.

Farm organistion

But the conclusion of the negotiations appear to have satisfied farm umbrella organisation chair, Soren Sondergaard, who is head of the Danish Agriculture and Food Council (DAFC).

He said: “These are major and difficult compromises.

“It was a prerequisite for being part of the tripartite in the first place, and we have been willing to do so.

“But we have also gained real influence and left a significant mark that will be decisive for Denmark’s future food production and future generations of farmers”.

The organisation has welcomed the fact that farmers making certain investments and changing practices on their farms can exempt themselves from the cow tax.

While many of Denmark’s water quality and GHG challenges due to agriculture are greater than Ireland’s only time will tell if this extensive plan will become the basis for greater EU wide action or an ambitious but failed exercise.

Cattle tax

Peatland tax

Emissions

Farm organistion

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