🇩🇰 Denmark’s €100/t agriculture tax explained 🐄

👷 It’s clear that this first-of-its-kind tax is clearly groundbreaking. So I decided to do what I do and dive into the details, analyse the actual bill, and break it down it for you.

🤩 The vision of this bill is nothing short of amazing: increasing the efficiency of agriculture while reducing its surface, to restore nature and biodiversity, while providing farmers with a futureproof environment and license to operate.

📜 The bill really breaks down into four parts major parts: 1️⃣ the tax itself, 2️⃣ soils, 3️⃣ forests, and 4️⃣ biochar carbon removal.

🔎 On the tax itself:

- The tax covers livestock emissions and emissions from manure handling

- The tax rate is set at 300 DKK per ton of CO2e in 2030 (€40), increasing to 750 DKK in 2035 (€100)

- There is a floor deduction of 60%, leading to an effective tax rate of 120 DKK by 2030 (€16), and 300 DKK by 2035 (€40)

- The tax will start in 2030 and revisited in 2032

🌾 On soils

- Aim to restore 140,000 hectares of carbon-rich soil by 2030, most of which will be purchased and restored by the government

- Introduction of 40 DKK (€5.4) tax per tonne of CO2 starting from 2028

Only farmers not part of land conversion projects will be subject to the tax

- Expected CO2 reductions of 0.3Mt in 2030 increasing to 0.8Mt in 2032

🌲 On forests

- Aim to create 250,000 hectares of forests by 2045, of which 80,000 hectares virgin forests

- 22b DKK (€3b) have been set aside for this

- Landowners will receive a subsidy of 75.5k DKK/ha (€10k) + 15k DKK/ha (€2k) if they commit to not selling any wood

- Expected CO2 reductions of 0.1Mt in 2030, rising to 1.7Mt in 2045

🪨 On biochar carbon removal (hashtag#BCR)

- In total, 10b DKK (€1.34b) will be invested until 2045: 0.2b. DKK in 2027 (€27m), 0.3b DKK in 2028 (€40m), 0.4b DKK in 2029 (€54m) and 0.6b DKK from 2030 onwards per year (€80m)

- A Pyrolysis Strategy is expected in the second half of 2024

- Expected CO2 reductions of up to 0.6Mt by 2030

✅ The bill still needs to be formally passed by the Danish government. I hear it should pass without any major issues after the summer break.

⚠️ Denmark is heading into unchartered territory as the first country in the world to attempt such a transformation of its productive lands. It acknowledges the risks and uncertainties, building in various moments of reassessment. I really believe this is the future and hope many countries will follow closely and try their own versions of this.

👀 Check out the actual bill here (in Danish): https://lnkd.in/dcmNGxA7

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⁉️ What is your take? Too visionary? The right approach? You all seem to have strong opinions and I’d love to hear them!

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