Denmark certainly made it to the headlines when it decided to implement a carbon tax on livestock, pushing the gassy cows and pigs in the focus once again.
But why taxation?
Denmark took a bold step by becoming the first country in the world to tax livestock farmers specifically for the greenhouse gases emitted by their cows, sheep, and pigs.
Well, not quite yet, but the project is already on the table, the Danish Parliament has only to adopt the new law. The missing part: innovation and future-proof solutions.
The Danish government aims to reduce its greenhouse gas emissions by a whopping 70% from 1990 levels by the year 2030.
And guess what?
Taxation Minister Jeppe Bruus believes that taxing “flatulent farm animals” (yes, you read that right) is a key part of achieving that goal.
Starting in 2030, Danish livestock farmers will be taxed 300 kroner (that’s about 40 EUR) per ton of carbon dioxide equivalent. By 2035, this tax will increase to 750 kroner (around 100 EUR) per ton.
These numbers are not far from the planned carbon tax that everybody is going to pay in the EU (based on their petrol consumption) from 2027 or 2028; as agreed at the end of 2022. Following marathon talks, negotiators agreed to start pricing the carbon emissions stemming from burning fossil fuels in road transport and heating in 2027, with a price ceiling of €45 per tons of carbon emitted that will apply until 2030. (EU approves CO2 tax on heating and transport, softened by new social climate fund) The EU level deal excluded agriculture and fisheries from this scheme because those are “sensitive” sectors.
Then Denmark stepped in.
We are talking about a large quantity of pigs and beef.
Danish farmers grow around 28 million pigs per year and 90 percent of this production goes for European export (mainly to Germany and the Netherlands). In comparison, Denmark has a population of 5.8 million. On the other hand, its food production is high enough to feed 15 million people. 22 percent of all Danish exports is related to the sector.
New Zealand had a similar law in the making, set to kick in by 2025.
Only it will not, following a U-turn.
The legislation got yanked from the statute book after some serious farmer grumbling and a change of government.
New Zealand decided to explore alternative ways to reduce methane emissions instead of sticking with the tax approach. They are not alone.
So, Denmark got the possibility to lead the way and punish farmers and agriculture in one of the most developed and greenest agricultural country with the simple, old tax policy.
The question is that how this added cost will influence Danish production.
Especially if other EU countries will not follow the lead.
New Zealand made its U-turn when several farmers planned to move their operations to other countries with less stringent regulations. “The government is committed to meeting our climate change obligations without shutting down Kiwi farms,” said New Zealand Agriculture Minister Todd McClay in 2022.
In 2024, farmers all around Europe have been protesting against various environmental regulations for several reasons. First, and foremost, they argued that the EU’s environmental rules, such as those limiting the use of fertilizers and pesticides, are too restrictive and make farming economically challenging. Especially in comparison of unfair competition from countries with less stringent environmental regulations.
These Eu-wide protest at the beginning of 2024 showed that farmers in Europe felt that green and socialist governments are punishing them and try to destroy their lifestyle. The rising costs of compliance with environmental standards, coupled with low agricultural prices, have added financial strain on farmers. Many feel that they are being unfairly burdened with the costs of addressing climate change. In some cases, subsidies to farmers are reduced if they cannot comply with new regulations. This puts additional financial pressure on farmers who are already struggling economically. Farmers are also concerned about competition from countries with less stringent environmental regulations.
During the protest farmers were attacked by governments and mainstream media that they are playing the cards of far-right movements, yet, in reality, it happened the other way around: only the so-called “far-right” seemed to see their struggle and promised to defend their interests against stringent environmental policies.
Well, the Danish Society for Nature Conservation described the tax agreement as “a historic compromise.” The NGO wearing the “cape of the environmental superhero” in the country declared that “It’s like they gathered all the stakeholders—the farmers, the industry folks, the unions, and probably a few sheep for good measure—and hashed out a deal”. The tax agreement was also hailed as a “historic compromise” by Maria Reumert Gjerding, head of the Danish Society for Nature Conservation.
But not everyone’s throwing a celebratory dance. Some farmers find these measures burdensome, especially after months of protests across Europe against climate change regulations that they fear might drive them out of business. Groups of farmers have asked the government not to act alone, but together with other EU states.
Maybe Copenhagen should look to the West for inspiration.
For the last couple of years, the United States reacted for the environmental, economic and supply chain issues with investment and innovation: from solar panel production to agriculture.
There aren’t any additional tax plans against the agricultural sector, a struggling, but indispensable sector in every country.
On the contrary. The Biden-Harris Administration has allocated significant funding for climate-smart agricultural practices through programs like the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP). With the Environmental Quality Incentives Program (EQIP) they target to planting cover crops, to help sequester carbon in the soil, reducing atmospheric CO2 levels. Plans are in place for better nutrient and waste management, as well; while the Conservation Stewardship Program (CSP) will support reducing tillage to maintain soil structure and increase carbon sequestration.
Instead of literally taxing “beef-fart”, research was initiated to change livestock diets (e.g. with seaweed supplements or probiotic feed additives) and improve manure management practices to help to reduce methane emissions.
These practices not only help reduce greenhouse gas emissions but also improve soil health, water quality, and biodiversity, contributing to a more sustainable agricultural system.
The introduction of a carbon tax on agriculture in the EU has sparked concerns about its potential impact on the sector and on food security and sovereignty. Farmers argue that the carbon tax increases their operational costs, making it harder to compete, especially against imports from countries with less stringent environmental regulations. This can potentially weaken the agricultural sector economically.
Higher production costs due to carbon taxes can lead to increased food prices. This can affect food affordability and accessibility, potentially impacting food safety.
World-famous European food safety might also weaken if food import will grow from less regulated countries. With Danish (and other European) farmers out of competition, the average European consumer will eat food with less controlled quality – on the same or higher price. Not to mention the question of European Food Sovereignty. There is a concern that stringent environmental regulations and taxes could reduce domestic production, leading to greater reliance on imports.This could undermine food sovereignty, as countries become more dependent on external sources for their food supply. That can mean more Chinese pigs, Brazilian, Argentinian and US beef on the European market.
One can argue which greenhouse gases are more harmful: those produced by transportation, construction or fossil fuel burning energy production or those coming from pigs, sheep and cows farts, but it’s not the point.
People should think about whether they are truly ready to eat polar-bear sized super pigs or super muscular, genetically engineered, lab-created ones.
