Regen farmers push back at Denmark’s ‘demonising’ tax on cattle

Danish dairy farmers face an annual tax per cow as the Government of Denmark introduces Europe’s first carbon tax on agriculture.

Regen farmers in the United Kingdom have reacted with dismay.

As the tax only targets raw emissions and does not also account for carbon drawdown, there is a grave danger that the decision will drive greater intensification of livestock, as farmers seek to reduce emissions but continue to externalise other impacts, for example on welfare, biodiversity and natural systems.

By contrast, ruminants in regenerative farm systems are an excellent way to mitigate and adapt to the climate crisis and to restore nature fast.

While a tax on net emissions could be used to drive good practice, the Danish tax on CO2e only addresses one side of the equation and therefore actively penalises best practice.

Robert Barbour, senior policy officer at the Sustainable Food Trust, said, “It’s great to see that a national government is willing to take action on the food systems climate impact. But while agricultural methane is an important issue to take action on, there are real risks with a methane tax.”

The Danish tax on CO2e will be applied to both dairy and pork farm systems and the climate impact will be assessed using the standard carbon accounting metric, GWP100.

However, the Intergovernmental Panel on Climate Change has recognised that GWP100 is highly inaccurate for measuring the warming activity of stable sources of short-lived greenhouse gases such as enteric methane.

The IPCC’s AR6, Chapter 7 page 123, says, “Expressing methane emissions as CO2 equivalent emissions using GWP-100 overstates the effect of constant methane emissions on global surface temperature by a factor of 3-4 […] while understating the effect of new methane emission source by a factor of 4-5’.”

The IPCC says that other metrics, such as GWP*, more accurately assess the warming impact of methane.

Barbour said, “The use of an inadequate equivalence metric, the lack of accounting for other GHGs or sequestered carbon, and a focus on the carbon footprint of an individual product rather than the whole food system – this could all result in a distorted understanding of what represents the most climate friendly foods. But we also need to avoid a single issue focus, when we really need to be assessing all aspects of sustainability – not just methane or carbon footprint.”

Carbon tax
After five months of negotiations, agreement on the CO2e tax was reached between the Government of Denmark, the Danish Agriculture and Food Council, the Danish Society for Nature Conservation, the Confederation of Danish Industry, the Trade Union NNF that organises workers within the Danish slaughterhouse and meat industry and the Danish Local Government Association.

From 2030 farmers will have to pay 120 Danish krone (~£34) per ton of CO2e, increasing to DKK 750 (~£85) per tonnes of CO2e in 2035.

A basic deduction (tax break) of 60 per cent will be applied to the average emissions from different types of livestock, providing an economic advantage to more intensive ‘climate-efficient’ farmers. After the deduction, the effective cost will be 120 DKK (£14) per ton of CO2 e in 2030, and 300 DKK (£34) in 2035.

Revenues from the tax will be channelled back to the sector and reinvested into green initiatives, climate technology, and production transformation, targeting the agricultural sectors facing the most difficulty transitioning. The government will also provide £4.5 billion to reforest 250,000 hectares of agricultural land by 2045, set aside 140,000 of lowland by 2030, and buy out certain farms to reduce nitrogen emissions.

Danish Economy Minister, Stephanie Lose, said, “With the Green tripartite agreement, we set a clear green direction for the future of Danish agriculture. We create a framework for a more sustainable, high-tech and efficient agricultural production, which ensures a green transition.”

Danish Tax Minister, Jeppe Bruus, said, “We will be the first country in the world to introduce a real CO2e tax on agriculture. Other countries will be inspired by it. The agreement shows how much we can achieve when we come together across party colours and interests to find joint solutions to one of the greatest challenges of our time.”

Cattle are being unfairly scapegoated
UK regenerative and agroecological farmers disagree strongly with the Danish approach.

Nikki Yoxall is a grazier from Aberdeenshire and Head of Research at Pasture for Life. She said, “We are not yet able to accurately and appropriately measure emissions on farm. All of the emissions data that we make use of in carbon audits, carbon calculators and life-cycle assessments is based on a standard set of measurements. While these are verified and supported by the IPCC, they don’t measure the actual impact on individual farms.

“It’s possible that a tax on net emissions – accounting for both emissions and drawdown – could be used to drive good practice, but the Danish CO2e tax actively penalises best practice, for example where cows are kept in regenerative systems to deliver adaptation, nature restoration and nutrient dense food.

“My biggest concern around all of this is that we’re not actually measuring the emissions on-farm. If we’re going to be penalising on-farm emissions – or rewarding drawdown – we have to facilitate the measuring of actual on-farm emissions.

“There have been a number of research projects and groups of people who have been trying to develop the tech to do this in a way that is non-invasive and is positive welfare for livestock and there is a real struggle for funding to do that.

“We cannot continue to base decisions on data that has come from research farms that do not actually reflect the reality of farms on the ground.”

Regenerative ruminant agriculture can achieve better than net zero – while also delivering adaptation, nature restoration, nutrient dense food and good jobs.

Patrick Holden, founding director of the Sustainable Food Trust said, “The emissions from cattle are part of an ancient carbon cycle and cattle have been unfairly scapegoated and demonised to distract attention from the real culprit, which we are all responsible for, namely our fossil fuel footprint. There is a symbiosis between cattle and soil and you should not be measuring the output of one on its own.”

The New Zealand Government also recently passed a similar law, but was forced to backtrack following heavy criticism from farming industry groups and some senior climate scientists.

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