Eight percent – that is the not inconsiderable proportion that agriculture in Germany contributes to the total CO2 emissions of the Federal Republic. The EU average is even ten percent. And yet, unlike other sectors such as energy, industry, transport and construction in the EU, farmers have not yet had to pay a CO2 price for their emissions.
However, given the farmers' protests in many European countries last winter, this exception is unlikely to be affected. With the exception of one country: Denmark. Agriculture there contributes even 35 percent of total emissions; This should end now.
A burp tax
The Danish government wants to take the step and become the first country in the world to introduce a CO2 tax on meat and milk production. The new tax is also known colloquially as the “burp tax”: its main objective is to combat the emission of climate-damaging methane gas by livestock.
Although methane disappears from the atmosphere faster than carbon dioxide (CO2), in 20 years it will be about 80 times more harmful to the climate than CO2 because it can capture much more heat on the Earth's surface. According to studies, methane alone is responsible for 0.5 degrees of the 1.1 degrees of global warming caused so far by man.
Denmark wants to reinvest the revenue from the new tax into climate protection. A fund for green spaces worth 5.4 billion euros aims to finance the reforestation of 250,000 hectares to remove more CO2 from the atmosphere. In addition, 140,000 hectares of moors will be returned to their natural state to be used as carbon dioxide storage.
Even farmers say yes.
The Danish climate tax will apply from 2030. Pig fattening farms and dairy farms will have to pay a total of 300 Danish crowns for each ton of CO2 they emit, about 40 euros at the current exchange rate. The tax will increase to the equivalent of 101 euros per ton in 2035. This corresponds to the tax that Danish industry will have to pay per ton of CO2 from 2030, partly on top of the EU emissions trading price.
“We encourage other countries to do this,” said Social Democratic Finance Minister Jeppe Bruus Christensen. In the past, only New Zealand had planned a CO2 tax on agricultural businesses, but abandoned the plan after violent protests.
In Denmark, by contrast, there was little dissatisfaction among farmers. They were “long and very difficult negotiations,” said Søren Søndergaard, president of the powerful Danish Agriculture and Food Association. “But we have also had a real influence and left a mark that will be crucial for the future of Danish food production and future generations of farmers.”
Farmers can be compensated for their consent. In exchange for the climate tax, they should receive a number of income tax rebates. This means that the actual additional financial burden is lower – it is estimated to be only between 15 and 30 euros per tonne of CO2. In addition, the climate tax can be avoided altogether if farmers invest in certain environmental and climate protection technologies. In 2032, it will also be examined whether the tax has a negative impact on the competitiveness of Danish farmers.
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“Such an agreement is very delicate”
It is also helpful if the tax has been prepared well in advance. In February, the government in Copenhagen sat down at a table with representatives from the food industry, climate organizations and agriculture and negotiated the law. A group of experts presented three different options, which were then debated.
Experts had proposed a CO2 price equivalent to 100 euros per ton, but to keep resistance as low as possible, the government reduced it to 40 euros. Climate activists are therefore not satisfied with the law; Danish climate think tank Concito, for example, described the CO2 price as “disappointingly low.” The Danish government defended the compromise: “In a Europe where farmers enter cities and burn tires and climate activists stay on the roads, such an agreement is very delicate,” said Foreign Minister Lars Løkke. Rasmussen, of the Moderate Party.