Danish farmers will have to pay 120 Danish krone per tonne (£13.62/t) of emitted CO2 equivalent (CO2e) from 2035, after its Government agreed to put the world's first carbon tax on farmers.

On June 24, agreement was reached between the Government of Denmark, the Danish Agriculture and Food Council, the Danish Society for Nature Conservation, the Confederation of Danish Industry, the Trade Union NNF, and the Danish Local Government Association, after five months of negotiations.

Climate tax

The climate tax on agriculture would be 300 krone/t (£34.04) of CO2e in 2030, increasing to 750 krone/t (£85.11/t) by 2035. A basic deduction of 60% would be applied to the average emissions from different types of livestock, providing an economic advantage to climate-efficient farmers.

After the deduction, the effective cost would be 120 krone/t (£13.62/t) of CO2e in 2030, and 300 krone/t (£34.04/t) in 2035.

The agreement also included funding for the establishment of more forests in Denmark and increased peatland restoration to ensure clean drinking water, with a clear ambition to comply with the EU Water Framework Directive.

Peter Kiær, chair of Danish agriculture group Bæredygtigt Landbrugm, which was not involved in the negotiation, said: "We believe that the agreement is pure bureaucracy, which is unnecessary. We recognise that there is a climate problem, and Danish agriculture will help solve it.

"But we do not believe that this agreement will solve the problems, because it will put a stick in the wheel of agriculture's green investments."

He added Danish farmers were ‘among the best at producing climate-efficient food' and must be able to continue.

Martin Lines, chief executive of the Nature Friendly Farming Network, said: "Agriculture can and must play a significant role in reducing its own emissions and has the potential to sequester carbon for others.

"A carbon tax should be implemented across all industries, with agriculture taking an active part not only in emission reduction but also in leveraging the opportunities to be rewarded for carbon sequestration."