Producers say the plan to introduce a carbon emission tax on farming will lead to reduced production and closed farms
COPENHAGEN, Denmark (Reuters) — Denmark’s farmers have voiced concerns that plans to levy a carbon emission tax on farming as part of efforts to meet Denmark’s ambitious climate goals would force them to reduce production and close farms.
Denmark, a major pork and dairy exporter, could become the first country in the world to levy an emissions tax on farming, a move that has broad political backing in the country, after New Zealand last year pushed back such a tax to the end of 2025.
A carbon tax on farmers could help Denmark achieve its legally binding 2030 target of cutting greenhouse gas emissions by 70 percent from 1990 levels.
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However, such a measure would also mean higher costs for farmers and as a consequence reduce production by as much as one-fifth, a government-commissioned group said in a recent report.
A tax of $146 per million tons of carbon dioxide emitted would have the biggest impact. The group also considered lower taxes of $73 and $24.
“These models are based on something very disappointing, namely that climate reduction can only come by reducing production,” said Peder Tuborgh, chief executive officer of dairy producer Arla Foods.
Tuborgh said new technologies had helped Arla’s 9,000 farmers in Denmark, Sweden, England, Germany and Benelux reduce emissions by one million tons in the last two years.
“There is an innovation path,” he said.
“We would like to continue that journey, rather than having to shut down our production.”
More than half of Denmark’s land is farmed, with agriculture accounting for about a third of the country’s carbon emissions, according to Danish climate think-tank Concito.
The agriculture sector has become a political battleground as the European Union strives to meet its net zero emissions target by 2050. Farmers across the bloc have been protesting for weeks, saying they are facing rising costs and taxes, red tape and excessive environmental rules.
The scenarios laid out by the government advisers would reduce agricultural production by six to 15 percent with cattle and pig production falling by around 20 percent under the harshest taxation scenario.
“It will be relatively dramatic if we chose to go down that path,” said Jais Valeur, CEO of Europe’s biggest pork producer, Danish Crown.
“It’s key that we encourage our best farmers to become better so that we can lead the way for a sustainable transition.”
