[News Terms] Dairy Powerhouse Denmark Imposes 'Agricultural Carbon Tax'

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Estonia Introduced in 2009, New Zealand and Denmark to Implement by 2030

Dairy powerhouse Denmark will become the world's first country to impose an 'Agricultural Carbon Tax' on farmers.

The 'Agricultural Carbon Tax (Agri-Carbon Tax)' is a new tax levied on all farms based on their greenhouse gas emissions such as methane and nitrous oxide. It is colloquially known as the 'fart tax.' If imposed on cows, it is called the 'cow fart tax,' and if on pigs, the 'pig fart tax.'

Cattle being raised on a farm.
[Photo by Pixabay]

Denmark has 60% of its land as farmland, and its pig farming industry is so developed that there are more pigs than people. It is the world's largest pork exporter, exporting 90% of its pig production.

The United Nations Food and Agriculture Organization (FAO) stated in a 2006 report that livestock farming is the largest contributor to carbon dioxide emissions. Methane gas from the burps, farts, and manure of livestock such as cows and pigs was identified as one of the main causes of global warming.

According to data released in 2022 by the U.S. think tank Institute for Agriculture and Trade Policy (IATP) and the environmental organization Changing Markets Foundation (CMF), the amount of methane gas emitted by the world's top 15 meat processing and dairy companies?including Brazil's JBS and Marfrig, the U.S.'s Tyson, and New Zealand's Fonterra?exceeded 80% of the total emissions of European Union (EU) member countries. This accounted for 11.1% of global livestock-related emissions.

In response, Shefali Sharma, head of IATP's Europe office, said, "It's truly shocking," adding, "We cannot allow just a few companies to raise so many livestock." The researchers explained in their report that due to poor statistical data from the companies, it was difficult to measure greenhouse gas emissions accurately, but they estimated methane emissions using publicly available data on production volumes by company and livestock farming conditions by region.

IATP and others analyzed, "If these 15 companies were considered a country, they would be the 10th largest greenhouse gas emitter," and "Their methane emissions exceed those of oil companies such as ExxonMobil, BP, and Shell." There are 1.5 billion cows worldwide, and experts estimate that a single cow produces 100 to 500 liters of methane gas daily, comparable to the emissions of a car in one day.

As methane gas from livestock such as cows and pigs has been identified as a major cause of climate warming, some countries have imposed taxes on livestock farts or mixed feed with ingredients that reduce carbon emissions.

Estonia has imposed a fart tax on cows since 2009, and New Zealand initially planned to introduce it in 2025 but postponed it to 2030 due to opposition from farmers. In Vermont, USA, 15 farms reduced methane emissions by about 18% by feeding cows alfalfa and flaxseed, legumes, instead of corn previously used as feed. A French dairy company is reducing methane emissions by mixing omega-3 fatty acids, used as dietary supplements, into cow feed.

Pigs being raised on a farm. [Photo by Pixabay]

According to Bloomberg News on the 24th (local time), the Danish government announced that it will impose a tax of 300 Danish kroner (about $43) per ton of carbon dioxide emitted by farms starting in 2030. The tax is expected to increase to 750 Danish kroner (about $107) per ton after five years, but the government promised higher tax deduction benefits in that case.

The Danish government expects the agricultural carbon tax to reduce carbon dioxide emissions by 1.8 million tons by 2030. This is also expected to help Denmark achieve carbon neutrality. The Danish parliament enacted a climate law in 2019, pledging to reduce greenhouse gas emissions by 70% by 2030 (compared to 1990) and achieve carbon neutrality by 2050.

In addition to the agricultural carbon tax, Bloomberg reported that the government plans to introduce subsidies worth 40 billion Danish kroner to support carbon emission reductions in the agricultural sector. Since February, negotiations involving the agricultural sector, food industry, nature conservation groups, and the Danish government have been ongoing, and they are evaluating the taxation model.