Key Takeaways
Denmark will begin taxing farmers in 2030 for cow and pig emissions the government insists contribute to climate change.
The government is ramping up the tax and easing the pain with tax breaks, but it will still equal about $100 per cow in 2030 and approach $250 by 2035.
Other governments such as New Zealand and the Netherlands have backed away from similar policies after election defeats and farmers’ recent influence on EU elections.
Despite Denmark’s tax, recent research has shown that grazing animals can actually benefit reductions in carbon dioxide through land use changes.
Starting in 2030, Danish livestock farmers will be taxed 300 kroner ($43) per metric ton of carbon dioxide equivalent emitted by their cows, sheep, and pigs in order to reduce methane emissions. By 2035, the tax will increase to 750 kroner ($108) per metric ton. However, due to an income tax deduction of 60 percent, the actual cost per ton will start at 120 kroner ($17.3) and gradually rise to 300 kroner by 2035. According to the U.N. Environment Program, livestock accounts for about 32 percent of human-caused methane emissions. The tax is part of the Danish government’s plan to reduce greenhouse gas emissions by 70 percent from 1990 levels by 2030. Denmark is the first country in the world to introduce a carbon dioxide tax on agriculture, which could lay the groundwork for a restructured food industry. New Zealand had passed a similar law due to take effect in 2025, but the legislation was removed from the statute after criticism from farmers and a change of government due to the 2023 election, in which a left wing coalition suffered a crushing defeat.
On average, Danish dairy cows, which account for much of the cattle population, emit 5.6 metric tons of carbon dioxide-equivalent per year. Using the lower tax rate of 120 kroner results in a charge of 672 kroner per cow, or $96. With the tax break in place, that levy will rise to 1,680 kroner per cow in 2035 ($241).
Denmark is a major dairy and pork exporter, and agriculture is the country’s biggest source of emissions. According to Statistic Denmark, as of June 30, 2022, there were 1,484,377 cows in the country, a slight drop compared to the previous year. Denmark also will tax pigs although cows produce higher emissions than pigs.
Denmark’s tax on livestock comes after months of protests by farmers across Europe against climate change mitigation measures and regulations that they say are driving them to bankruptcy. Climate-based policies are seen by many as an attack on farmers and have led to a change in government in the Netherlands. The Danish tax is to be approved in the 179-seat Folketing, or parliament, but the bill is expected to pass after a broad-based consensus was reached among the government, representatives of farmers, the industry, unions, and others.
Study Finds Cattle Grazing Mitigates Climate Change
Despite claims that livestock contributes to methane emissions in the atmosphere, a recent study found that the cattle grazing cycle mitigates climate change. According to research from agribusiness groups Alltech and Archbold, without cattle grazing, wetland soils release greater amounts of methane. According to Dr. Betsey Boughton, director of agroecology at Archbold, who measured greenhouse gas emissions in grazing and non-grazing pastures, cattle grazing contributes to a net reduction in emissions. Every year, the company sequesters 1,201 tons of carbon dioxide equivalent at Archbold’s Buck Island Ranch—a 10,500-acre ranch in Lake Placid, Florida.
Cows eat the grass, which does not allow as much decomposition to occur on the ground. Without cows, more carbon dioxide is actually emitted. The research shows that agriculture can be one of the most powerful weapons in the fight against climate change. On average, Buck Island Ranch sequesters more carbon each year than it emits. It is a net-carbon sink. The results confirm that carbon-neutral — and even net-positive — beef production is possible. And, as Boughton indicated in a press release, all of this work is scalable to other parts of the world.
The study, which started in 2019, provides a deeper understanding of the grazing-cattle carbon cycle, one that entails the entire cycle and is not solely based on greenhouse gas emissions from the animal but also on natural greenhouse gas emissions from the land and the sequestration of carbon in the soil. The study shows that it is important to look at the full cycle and not jump to conclusions with a narrow focus as the Danish government has done.
The soil’s ability to sequester carbon is a critical part of the story. Alltech Crop Science and Ideagro, which joined the Alltech family of companies in 2023, are studying how microbial populations can enrich soil chemistry and nutrient density, leading to increased carbon sequestration in the soil. The potential to capture carbon in the soil provides a critical role for the agri-food community in combatting climate change while improving soil health, boosting crop yields and promoting biodiversity. The global food system is a major contributor to the climate change, producing around a third of greenhouse gas emissions.
Conclusion
The Danish government is taxing its farmers almost $100 per cow annually beginning in 2030 because of the methane emissions that result from their farts and manure. The irony is that the Danes are major exporters of beef, so the legislation will have a negative effect on the country’s economy. But a new study shows that the Danish government is narrowly looking at the problem because grazing animals can lower life cycle emissions as grass grazing removes some of the decomposition from occurring in the soil. Without cows, more carbon dioxide is actually emitted. While emissions from animals damaging the climate have always provided humor for comedians and critics, the Danish government’s new tax on farmers will not be producing laughs.
