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Three models on a potential CO2 tax on agriculture


The expert committee tasked with finding a solution to reduce the CO2 emissions within agriculture has proposed three potential models. All three models will help Denmark reach its 2030 climate targets. The question is more about who should bear the cost – the farmers or the taxpayers. 

  • First model of taxation – 750 DKK per CO2 ton emitted. This is the most expensive model for the farmers and it will lead to a significant decline in agricultural activity. CO2 emissions will be reduced by 3.2 million tons until 2030 and is expected to lead to 8000 lost jobs in agriculture (10.2%). 
  • The second model – 375 DKK per CO2 ton emitted. The middle proposal where both the farmers and the state pay for the green transition within agriculture. CO2 emission reductions of 2.8 million tons until 2030 will be obtained via new technologies, resulting in a potential reduction of 4,000 jobs (5.1%). 
  • The third model – 125 DKK per CO2 ton emitted. The most expensive model for the state, as it pays for most of the green transition. CO2 emissions will be reduced by 2.6 million tons until 2030, leading to a reduction of 2,000 jobs (2.6%).

For models two and three to work, the expert committee recommends that financial support be introduced to convince farmers to adopt pyrolysis (in which you can store CO2 in biochar  obtained by burning straw and other organic material at a very high heat). On the other hand, the Climate Council says the technology is too early and still controversial. 

The expert committee says that a tax on food production is 14 times more effective than a tax on food itself. It is still expected that the price of food will rise. For example, with the first model of taxation, 500g of beef will become 4.5 DKK more expensive, while the price for a liter of milk will increase by 60 øre. 

Narcis George Matache
Narcis George Matache
Executive Editor and Founder of "Last Week in Denmark".

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