Denmark, a major exporter of pork and dairy, is set to be the first nation to implement a tax on livestock CO2 emissions starting in 2030, aiming to set a precedent for other countries. Initially proposed by experts in February, this tax supports Denmark’s goal to reduce greenhouse gas emissions by 70% from 1990 levels by 2030.

Taxation Minister Jeppe Bruus stated, “We will be the first country in the world to introduce a real CO2 tax on agriculture. Other countries will be inspired by this.”

Mette Frederiksen, the Danish prime minister, said she hoped the deal would provide a template for other countries.

Under the proposed plan, starting in 2030, farmers in Denmark will be taxed 300 Danish crowns (approximately $43.16) per tonne of CO2, which will increase to 750 crowns by 2035. Farmers will receive a 60% income tax deduction, making the effective cost per tonne start at 120 crowns and rise to 300 crowns by 2035. Additionally, subsidies will be provided to help farmers adjust their operations.

For the initial two years, the revenue generated from the tax will be allocated to assist the agricultural industry in transitioning towards more environmentally friendly practices. After this period, the use of the proceeds will be reevaluated.

The policy is just one part of a broader, ambitious environmental strategy that includes investing 40 billion Danish kroner ($5.7 billion) in various green initiatives like reforestation and establishing new wetlands. These efforts are aimed at bolstering the country’s resilience against climate impacts, enhancing biodiversity, and securing long-term sustainability.

Agriculture is responsible for roughly a third of global greenhouse gas emissions, predominantly from livestock farming, which is notably one of the most environmentally harmful industries. According to the UN’s Food and Agriculture Organization, livestock farming alone contributes 14.5% of all human-caused greenhouse gas emissions. The industry also faces additional environmental challenges, such as deforestation, excessive land and water use, and ethical concerns regarding animal treatment.

Denmark is taking significant steps to mitigate its environmental impact from agriculture. The government projects that its new initiatives will cut emissions by 1.8 million tonnes of CO2 equivalent by 2030. Additionally, Denmark plans to invest 40 billion kroner to plant 250,000 hectares of forest on agricultural land by 2045 and purchase farmland to reduce nitrogen emissions from fertilizer use.

In October last year, Denmark unveiled a comprehensive strategy aimed at transitioning to a plant-based food system. This 40-page roadmap positions plant-based diets as the future, detailing Denmark’s ambition to become a global leader in meat-free food production. The plan is considered groundbreaking in its scope and focus.