Denmark announces historic tripartite agreement to cut agricultural carbon emissions and restore nature

On 24 June, the Danish government and leading industry, agriculture and environmental groups reached agreement on a historic plan to cut carbon from agriculture and restore nature. The green tripartite agreement defines Denmark’s long-term basis for the conversion of agricultural land as well as the transition of food and agricultural production in line with the country’s 2030-target.

By State of Green | [email protected]

25 June 2024

Publication: Producing more with less

Discover pathways toward a resilient, resource-efficient and decarbonised agrifood system in this white paper launched during COP28 in Dubai.

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On 24 June, Denmark announced a historic agreement, showing the way forward for a resource-efficient agrifood sector. With the so-called green tripartite agreement between the Danish government and leading industry, agriculture and environmental groups, Denmark becomes the first country in the world to tax livestock emissions.

The tax entails a fee of DKK300 (EUR 40.21) per tonne of CO2e on livestock emissions from 2030, rising to DKK750 in 2035, though with a 60% floor deduction. The effective tax will thus amount to DKK 120 per ton CO2e in 2030 increasing to DKK 300 per tonne of CO2e in 2035.

In addition, just over DKK 30 billion (EUR 4 billion) will be set aside for the conversion of 140,000 ha carbon-rich lowland soils including fringe areas and 250,000 ha of new forest. In addition, a subsidy scheme of just over DKK 10 billion (EUR 1.34 billion) is being set up for the production of biochar through pyrolysis.

As part of the larger transformation of Denmark’s agricultural and food industry, the parties also agreed on the need to speed up the development and maturation of new climate technologies and initiatives, and that the reduction effects of these must be documented as soon as possible so they can be counted in the national emissions inventory.

Overall, the efforts as part of the agreement are estimated to reduce Danish emissions by 1.8 million tonnes of CO2e in 2030, thus closing the shortfall concerning the national 2030 climate target of reducing emissions by 70%.

New fund and EU focus

The agreement will create major changes in the Danish agrifood industry and the landscape in the coming years. The vision is for Denmark to be an international role model for a holistic and multifunctional approach to land management, where consideration for nature, biodiversity and drinking water go hand in hand with efficient and modern food production.

In order to drive the transformation of the Danish land area, Denmark is establishing a new green fund. The fund will handle initiatives such as afforestation, extraction of low-lying land and strategic land acquisition. The fund’s activities will include efforts for approximately DKK 40 billion (EUR 5.36 billion)

The agreement also unfolds principles for efforts ensuring that Denmark will fulfill the EU’s water framework directive so that Danish coastal waters are once again brought into good ecological condition.

Facts: Denmark’s green partite agreement entails:

Reductions in greenhouse gas emissions for 1.8 million tonnes of CO2e in 2030 – and potential for up to 2.6 million tons.
A CO2e tax on emissions from livestock. A fee of DKK 300 per ton CO2e in 2030 increasing to DKK 750 per tonnes of CO2e in 2035 with a floor deduction of 60%. The effective tax will thus amount to DKK 120 per ton in 2030 rising to DKK 300 per tonne in 2035.
Return of proceeds to the industry: The proceeds from the livestock tax in 2030-31 are returned as a transition support pool to support the green transition of the industry. Handling of the proceeds will be revisited in 2032.
Establishment of a new green fund, which will include activities for approximately DKK 40 billion.
Construction of 250,000 hectares of forest (equivalent to an area the size of Lolland-Falster and Bornholm).
Extraction of 140,000 hectares of carbonaceous lowland soils incl. peripheral areas.
A target of at least 20% protected nature. The construction of 80,000 ha of private virgin forest, 20,000 ha of state forest and the removal of low-lying land will increase the extent of protected nature considerably.
Subsidy scheme totaling just over DKK 10 billion until 2045 for the storage of biochar produced by pyrolysis.
Paradigm shift in the nitrogen effort, where land conversion is the main engine to achieve the goals of the EU’s water framework directive.

Fee lifting of slaughterhouses for DKK 45 million annually with effect from 2029, as well as setting aside a pool for upskilling of a total of DKK 100 million over the period 2027-30.