Growing population and climate challenges

By 2050, the world’s population will reach approximately 10 billion, and projections from the Food and Agriculture Organization of the United Nations (FAO) indicate a 70 percent increase in current food production will be necessary.

The global food and agriculture industry faces a significant task, as it accounts for 24 percent of the world’s CO₂ emissions and 30 percent of global energy consumption. Agriculture is the largest overall water user globally, responsible for 70 percent of freshwater withdrawals, while food and beverage processing makes up roughly 20 percent of all industrial water consumption.

Moreover, the industry must contend with the challenges of climate change, environmental degradation and biodiversity loss. Food production in all climates faces potential crop losses and reduced yields. To adapt, the industry must adopt resilient practices and technologies. Crops need to be designed to handle unstable weather, and technology must be applied to navigate shifting conditions and ensure efficient use of resources across the value chain.

Efficiency drives competitiveness

These challenges, coupled with pressure to reduce prices and marginal costs, mean that efficiency measures can create a tangible competitive advantage.

Seizing this opportunity is crucial for a small country like Denmark, where the food and agriculture industry accounts for around one-fifth of all exports, and 60 percent of the land area is dedicated to agriculture.

Since 2000, the industry has achieved energy savings of 25 percent in food processing, and agricultural emissions have been reduced by 23 percent compared to 1990. All the while, the volume of food processed has grown, demonstrating that it is possible to produce more with less. Additionally, the sector is contributing to the green transition by supplying biomass for energy production and bio-based materials.

A world first

Still, primary production accounts for around 34 percent of Denmark’s CO₂ emissions, making it a key area to address in order to reach the goal of a 70 percent reduction by 2030. This is why, in June 2024, the Danish government, the industry and environmental organisations agreed on the world’s first CO₂e tax on agriculture.

From 2030, Denmark will introduce a carbon tax on CO₂-equivalent emissions from livestock – a key step in accelerating the green transition of agriculture. With a 60 percent base deduction, the most climate-efficient farmers can avoid the tax by reducing emissions.

Revenues will be reinvested directly into the sector to support green innovation and sustainable practices, helping ensure that Danish agriculture remains competitive and future-fit. The public-private partnership behind the agreement shows a bold way forward in transforming food systems.

Cutting agriculture emissions and restoring nature: Discover Denmark’s historic tripartite agreement