Denmark’s Groundbreaking Agriculture Climate Policy Sets Strong Example for the World

Denmark's groundbreaking new agriculture and climate policy, which taxes greenhouse gas (GHG) emissions from livestock production, restores nature and pays farmers to reduce nitrogen pollution, is the world's most comprehensive national effort to address the environmental challenges of agriculture.

Globally, agriculture and associated land use change contribute around one quarter of GHG emissions. To keep global warming below 1.5 degrees C (2.7 degrees F) - or even under 2 degrees C (3.6 degrees F) - governments must take ambitious action to reduce emissions from food systems. However, so far, governments have only devoted a fraction of their efforts to reducing agricultural emissions as they have for fossil-fuel emissions.

Agricultural emissions are particularly significant in Denmark. Today, they contribute more than one quarter of Denmark's GHG emissions, and with the country's expected measures to decarbonize energy and transport emissions, agriculture could account for the majority of national emissions within a decade. The country has set ambitious goals to reduce overall economy-wide emissions by 70% by 2030.

Cows graze in a Demmark meadow. Denmark's new agriculture policy aims to reduce emissions by imposing taxes on livestock emissions. Photo by Frank Bach/Alamy Stock Photo.

Since 1990, Danish farmers have already made some progress by reducing excess nitrogen use - which helps mitigate harmful nitrous oxide emissions - and by increasing the efficiency of the dairy and pork sectors. But until recently, no policy existed that would achieve the country's announced goal to reduce agricultural emissions by 55% to 65% by 2030.

In June 2024, Denmark announced a Green Tripartite Agreement between government, the environmental community and the agriculture industry, which combines regulatory teeth and largescale government funding to address emissions. The comprehensive policy will simultaneously reduce the country's nitrogen pollution and improve biodiversity by restoring peatlands and planting new forests.

These new measures complement Denmark's previously announced efforts to increase production of plant-based proteins and to reduce food loss and waste. The capital city of Copenhagen, which has signed WRI's Coolfood Pledge, reduced its food procurement-related emissions by 25%, a year earlier than the original 2025 goal, by reducing its consumption of meat and shifting toward plant-based foods. Taken together, these efforts make Denmark a leader in the Produce-Protect-Reduce-Restore actions that WRI research has shown are necessary to feed a growing world population while reducing GHG emissions and restoring nature.

Here we take a closer look at why this new policy is so significant and how it should serve as inspiration for other countries to create similar policies.

What's in Denmark's New Agriculture and Climate Policy?

Denmark is a net exporter of agricultural products - primarily pork and dairy - and by one estimate, the country produces three times the amount of food than it consumes. Denmark also accounts for 7% of Europe's pork production and 4% of its milk.

This contribution to global food supply comes with environmental costs. Around half of Denmark's agricultural greenhouse gas emissions result directly from production of meat and milk in the form enteric methane ("cow burps") and manure management. Other major emissions result from the application of nitrogen fertilizer and manure to soils, and from drainage and farming of peatlands, which releases much of the carbon in peatland soils. Beyond the resulting GHG emissions, the losses of nitrogen through the air from livestock farms and through leaching of water from farm fields contributes to serious pollution in coastal waters. And because Denmark has devoted so much of its land to cropping for animal feed, only a tiny percentage of land is devoted to valuable habitats, such as natural forests or wetlands.

Denmark's Green Tripartite Agreement includes three key elements that address these environmental challenges:

• A Livestock Emissions Tax: The agreement includes a marginal tax on livestock emissions that exceed reduction targets. Pork and dairy producers will not pay taxes on 60% of average emissions per animal, so farmers can avoid taxes if they can cut their emissions by 40% of today's average. But farms will pay about $40 per ton of emissions (carbon dioxide equivalent) above these average levels in 2030, which will rise to around $100 in 2035. Taxes at that rate provide a powerful incentive to reduce emissions to the target level. The revenue these taxes generate will go into a fund designed to help all producers reduce emissions.
• Incentives to Reduce Nitrogen Pollution: Denmark will pay farmers $100 per ton to reduce greenhouse gas emissions from nitrogen fertilization of farm fields, such as nitrous oxide. It intends to use funds from EU's Common Agricultural Policy. Nitrogen use by the agricultural sector has been one of the leading causes of marine, freshwater and groundwater pollution and overall nature degradation in the EU.
• Promote Biodiversity and Preserve and Sequester Carbon: Denmark will restore 140,000 hectares of drained peatlands currently in agricultural use and establish 250,000 hectares of new forest by 2045. Overall, around 10% of Denmark's land will be turned into valuable habitat in ways that either reduce carbon emissions or store it. Forest restoration will focus on native trees and those fields that leach the most nitrogen into coastal waters. To support this restoration, Denmark is establishing a new Green Area Fund with 40 billion Danish kroner ($6 billion).

Taken together, the policy is remarkably comprehensive - balancing agricultural production, emissions reductions and nature restoration - and is highly consistent with a WRI 2021 report that set a pathway for Danish agriculture to become carbon neutral and calling for precisely the type of social contract that has emerged.

Unlike some agricultural plans that exaggerate the potential to offset agricultural emissions through soil carbon sequestration on working agricultural lands, this plan focuses primarily on reducing actual agricultural emissions. And unlike a few countries that have turned grazing land into plantation forests to absorb carbon, the ambitious land area restoration will provide valuable habitat and target peatlands, which are the most carbon-valuable form of restoration.

The policy instruments are also generally structured to preserve Denmark's climate-efficient agricultural production. The well-crafted tax on livestock gives farmers an incentive to increase the efficiency of their production rather than to reduce production.

Nitrogen pollution reductions are to be paid for by redirecting EU farm subsidies, which is a major step forward. A 2020 study by one of us found that almost no such payments have funded climate mitigation, and environment and research groups have long pushed for this kind of funding shift. The policy also includes more broadly worded commitments for necessary research and development, that seeks to create a level playing field for Danish agriculture through EU policy, and to maintain Denmark's agricultural production.

The coastline of Bornholm in Denmark. The country's agriculture policy aims to prevent pollutants from reaching the sea, as well as restores peatlands, which is the most carbon-valuable form of restoration. Photo by CORTUUM /iStock.

How Could Denmark's Agriculture and Climate Policy Further Improve?

Given the agreement's high ambition, pointing out any shortcomings may seem unfair, but there are a couple of areas on which policy can build further. WRI's report on Danish agriculture found that Denmark's vast subsidies for biogas are cost-ineffective: extending biogas facilities to all of Denmark's manure could require subsidies equal to the value of all Danish agriculture. Biogas plants have also been adding crops to manure to generate sufficient biogas, and we found that the climate costs of devoting land to these crops can wipe out any climate benefits from the biogas.

Denmark has fortunately scaled back its financing for new biogas facilities, although it is still considering a policy that would target more. As the country commits to reforesting significant amounts of agricultural land, it is even more important to ensure that the agricultural land now used for biogas returns to producing food. To the new policy's credit, however, it identifies several promising, potentially cheaper, manure management technologies as priorities for trials.

The agreement also says little about mitigating Denmark's contribution to global emissions and deforestation through its large imports of feed crops, particularly soybeans from Latin America. In its 2021 report, WRI encouraged Denmark to invest in projects to boost agricultural yields sufficiently in countries it imports from to avoid contributing to the expansion of agricultural land. For example, to prevent Danish demand for imported soybeans from leading to deforestation in Brazil, Denmark could invest in projects that direct Brazilian soybean cropland expansion into low-yielding pasture while improving the productivity of other pastures enough to make up for lost food production. Even so, the agreement makes a step in this direction by committing Denmark to encourage international efforts, which it can help achieve through the European Union.

Soybeans are harvested at Fartura Farm in Brazil. While Denmark's new agriculture policy focuses on national emissions, it does little to mitigate against its global contributions through its large imports of soybean imports from Latin America. Photo by paulo fridman/Alamy Stock Photo.

What's Next for Denmark's Agriculture and Climate Policy?

However impressive, Denmark's Green Tripartite Agreement is just a start, and achieving its goals will be challenging. Three parts of that challenge are particularly worth following:

1. Denmark will need to choose the best practices and technologies that mitigate agricultural emissions, including the mitigation of livestock emissions or emissions from use of nitrogen on fields. Unlike energy emissions, which directly reflect the quantities and types of fossil fuels used, agricultural emissions cannot realistically be measured on each farm. Denmark therefore needs to develop sound estimates of the climate benefits of each agricultural technology or management practice and do so using farm information it can verify. This is a challenging task, and one that will evolve with new science over time.
   
   Making these decisions will require more science. When WRI wrote the 2021 report on Danish agriculture, for example, we found that emissions estimates from manure storage facilities varied greatly. Truly addressing these emissions requires more reliable estimates, which could cost only a few million dollars to obtain. To implement its plan well, Denmark will have to spend the money to do the necessary science.
   
2. Improved technologies to mitigate agricultural emissions will be needed, and the 2021 report identified many with real promise. These range from wheat varieties that reduce nitrogen losses, to feed additives for cows to reduce methane, and even bolder ways of turning grasses into high quality feeds. The agreement specifically recognizes the need for more research and development and calls for new procedures to expedite this work, including for many research priorities identified in our report. Crafting these new procedures and obtaining this funding will be critical. Globally, such agricultural mitigation research has been extremely underfunded. Denmark has properly recognized the importance of enlisting other countries in such expanded research and development efforts as well.
   
3. Denmark will need to achieve these climate and nature goals without shifting its agricultural production to other countries and continents. Denmark's livestock production is among the most climate-efficient in the world. For example, while it would be more climate-efficient for people to drink soy milk than cow's milk, global dairy consumption is rising rapidly and will almost certainly continue to do so. Therefore, it's better for Denmark to supply daily milk than to shift that production elsewhere in the world. The agreement appropriately recognizes that Denmark should avoid "offshoring its climate footprint" by reducing its food production. Maintaining food production while restoring forests and peatlands requires boosting yields on remaining agricultural land, which should also be a major focus of work going forward.

What Lessons Can Other Countries Take from Denmark?

Denmark's well-balanced policy shows other countries how they can take real action on agricultural emissions. As the policy explicitly recognizes, it will only be a true success if it encourages similar climate ambition for the European Union as a whole. That would also help ensure a level playing field for Danish agriculture and help prevent leakage of food production and its environmental impacts to other countries.

This policy also shows the power of setting ambitious climate targets. Denmark successfully brought together government, the agriculture industry and environmental groups into the Green Tripartite because each group recognized there would be no way to meet the country's ambitious climate goals without strong efforts by the agriculture and land sector. As countries update their national climate commitments (known as nationally determined contributions or NDCs) in 2025, they should include agriculture-specific GHG reduction targets and incorporate additional agricultural mitigation measures.

Although the right mix of Produce-Protect-Reduce-Restore actions will vary by country and by region across the world, as the world looks to the 2026 UN climate summit (COP30) in Brazil, other countries would do well to learn from Denmark's comprehensive policy and the solutions the country develops as it moves forward.