New question marks over Danish CO2 tax for agriculture and livestock farming

The annual meeting of the major Danish agricultural umbrella organisation Landbrug & Fødevarer (L&F) last week was almost exclusively about the stalled negotiations for the Danish Climate Agreement that are currently being prepared. 

The agricultural sector and politics are in a crucial phase now that the tariff negotiations of the tripartite agreement are stagnating, despite the previous agreement within the civil society of governments, businesses, agricultural associations, nature clubs and local authorities.

The meeting in Herning was dominated by a sense of urgency. More than 400 farmers expressed concerns about the future of their businesses. The meeting was attended not only by prominent representatives of the agricultural sector but also by five Danish ministers. 

Søren Søndergaard, Chairman of L&F, said in his opening speech that the agricultural sector is ready to adapt and contribute, provided there is clear political support. Minister for Climate, Energy and Utilities Lars Aagaard called farmers the “heroes in the story” for their willingness to contribute to the green transition.

Chairman Sondergaard criticized the leaked information about the negotiations, which he said further complicates the discussion. The leak caused unrest and mistrust within the sector and made the negotiations more complicated. The politicians still have to choose between three options for nature restoration and emission reduction, with associated lower or higher tax rates.

A new obstacle to a final agreement are two recent reports that question the new CO2 climate tax for agriculture and livestock farming. These reports, published just before the meeting, have cast additional doubt on the economic consequences for farms. 

One report shows that nitrate and nitrogen pollution is higher than previously calculated, and the second report shows that Danish farmers' incomes have risen sharply in recent years. In politics and civil society, it is now being said that farmers should pay more for the transition.

Despite the disappointing reports and the lack of a breakthrough during the meeting, Minister Aagaard expressed his hope that the politicians will make a decision soon. He stressed that it is necessary to act quickly to maintain the confidence of the agricultural sector and to realize the green transition without the sector suffering unnecessary damage.