Denmark announces agreement on landmark CO2 tax for agriculture
Denmark’s government has announced an agreement with agriculture and nature conservation groups which could see the introduction of a world-first CO2 emissions tax on farming.
The government announced the agreement, which has been months in the making, after reaching consensus with a string of organisations on Monday.
The various groups have agreed that the agriculture industry will from 2030 pay a tax of 300 kroner per ton on its CO2 emissions. The tax will rise to 750 kroner in 2035, according to the text of the agreement, which was presented at a Ministry of Economic Affairs briefing.
The tax is likely to make Denmark the first country in the world to impose an emissions tax on its agriculture sector.
That will be partially offset by a base deduction available to agricultural producers which will also affect their overall tax burdens.
“With a base deduction of 60 percent, this equates to an effective CO2 tax of 120 kroner per ton in 2030 and 300 kroner per ton in 2035,” the text states.
The deduction will give a “continuity with the tax burden, actual financial options and incentives to use them,” it adds.
A new fund, ‘Danmarks Grønne Arealfond’ will also be established under the agreement. Some 40 billion kroner are set aside for the fund for reforestation and other initiatives including extraction of carbon-rich low-lying soils, which contribute to emissions.
With the agreement Denmark can meet its target of a 70 percent reduction in emissions by 2030, Tax Minister Jeppe Bruus said at the briefing.
“This is the last political agreement needed for us to reach our 70 percent target in 2030. It’s a landmark,” he said.
At the briefing, the president of the Danish Society for Nature Conservation (Danmarks Naturfredningsforening, Maria Reumert Gjerding called the deal a “huge step in the right direction”
A Danish CO2 agriculture tax has long been the goal of the coalition government but has faced resistance from farmers and from some opposition parties, as well as from interest organisations for the sector.
That an agreement has now been reached at all was praised by Moderate Party leader Lars Løkke Rasmussen, who urged parliament to vote through the “delicate” deal in its current form.
Rasmussen said it was “unique” that organisations with missions as different as the Society for Nature Conservation and the Danish Agriculture & Food Council (Landbrug og Fødevarer) had found middle ground on the issue of the CO2 tax.
“This is a Europe where farmers drive into big cities and burn tyres and where climate activists glue themselves to motorways,” he said.
“So you you also have to understand that this is delicate, and you will break it up if you start saying you would rather have more of one thing or the other,” he said.
Parliament has begun its summer recess, meaning the government must wait until autumn to table the necessary bill for the agreement to be implemented.
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The government announced the agreement, which has been months in the making, after reaching consensus with a string of organisations on Monday.
The various groups have agreed that the agriculture industry will from 2030 pay a tax of 300 kroner per ton on its CO2 emissions. The tax will rise to 750 kroner in 2035, according to the text of the agreement, which was presented at a Ministry of Economic Affairs briefing.
The tax is likely to make Denmark the first country in the world to impose an emissions tax on its agriculture sector.
That will be partially offset by a base deduction available to agricultural producers which will also affect their overall tax burdens.
“With a base deduction of 60 percent, this equates to an effective CO2 tax of 120 kroner per ton in 2030 and 300 kroner per ton in 2035,” the text states.
The deduction will give a “continuity with the tax burden, actual financial options and incentives to use them,” it adds.
A new fund, ‘Danmarks Grønne Arealfond’ will also be established under the agreement. Some 40 billion kroner are set aside for the fund for reforestation and other initiatives including extraction of carbon-rich low-lying soils, which contribute to emissions.
With the agreement Denmark can meet its target of a 70 percent reduction in emissions by 2030, Tax Minister Jeppe Bruus said at the briefing.
“This is the last political agreement needed for us to reach our 70 percent target in 2030. It’s a landmark,” he said.
At the briefing, the president of the Danish Society for Nature Conservation (Danmarks Naturfredningsforening, Maria Reumert Gjerding called the deal a “huge step in the right direction”
A Danish CO2 agriculture tax has long been the goal of the coalition government but has faced resistance from farmers and from some opposition parties, as well as from interest organisations for the sector.
That an agreement has now been reached at all was praised by Moderate Party leader Lars Løkke Rasmussen, who urged parliament to vote through the “delicate” deal in its current form.
Rasmussen said it was “unique” that organisations with missions as different as the Society for Nature Conservation and the Danish Agriculture & Food Council (Landbrug og Fødevarer) had found middle ground on the issue of the CO2 tax.
“This is a Europe where farmers drive into big cities and burn tyres and where climate activists glue themselves to motorways,” he said.
“So you you also have to understand that this is delicate, and you will break it up if you start saying you would rather have more of one thing or the other,” he said.
Parliament has begun its summer recess, meaning the government must wait until autumn to table the necessary bill for the agreement to be implemented.
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