Denmark will start charging farmers for agricultural greenhouse gas emissions from 2030.
A quarter of Denmark’s emissions come from livestock, and the Copenhagen Post reports the government will from 2030 charge Danish landowners a levy based on emissions from livestock, fertiliser, forestry and the disturbance of carbon-rich agricultural soils.
The effective cost to farmers will initially be $30/tonne of CO2-equivalent (CO2e) emitted, rising to $70/tonne of CO2e from 2035.
To soften the initial impact, the Danish government is subsidising 60% of the true cost, with proceeds invested back into the sector to reduce emissions.
It is part of a suite of green packages being introduced by the Danish government that includes planting 250,000 hectares of new forests by 2045 and setting aside 140,000ha of lowlands to protect carbon-rich soils by 2030.
The government will also acquire strategic agricultural lands and distribute or sell them to private and public investments to enhance nature, for the installation of renewable energy or to boost technology and measures to cut emissions.
Amsterdam-based Callum Lott, Fonterra’s manager of trade strategy, sustainability and stakeholder affairs for Europe, Middle East, Africa, said there is much interest in Denmark’s move, but he does not expect a rush of counties replicating what the Danes are doing.
He told Farmers Weekly that Fonterra initiatives such as Farm Environment Plans have been welcomed by the market and customers.
“What Fonterra has is a credible plan and pathway to how we achieve greenhouse gas emission reductions, and it has been well received, especially the data we have.”
Other initiatives, such as AgriZero, an entity in which Fonterra is a shareholder and which invests in methane and greenhouse gas emission reduction initiatives, are also well received.
Lott said the European Union has introduced several environmental and sustainability policies, which has obligations on companies.
These include the Green Deal, regulations proving certain food production has not resulted in deforestation, the Corporate Sustainability Reporting directive and the Corporate Sustainability Due Diligence directive.
The Green Deal will restrict the use of fertiliser and chemicals while a carbon border adjustment mechanism taxes imports of high-emitting products based on their carbon footprint so as not to adversely impact domestic industry.
Agricultural products such as meat and dairy are currently excluded.
Lott said the Corporate Sustainability Reporting directive requires companies to report how they are reducing the environmental impact from within their supply chain.
That will mean questions being asked of companies such as Fonterra.
Farmers are not having to confront sustainability issues on their own.
James McVitty, Fonterra’s Chicago-based manager of trade strategy, sustainability and stakeholder affairs for the Americas, said sustainability issues transcend every level of the food industry.
In response producers, processors and retailers are working together through several industry and sector groups and bodies to find solutions.
The Sustainable Agricultural Initiative (SAI) has for 20 years promoted growing a sustainable, healthy and resilient agricultural sector while creating strong and secure supply chains.
Its 190 members are a who’s who of global dairy processors and buyers, including Danone, Mars, Nestlé, McDonald’s, Starbucks, Hershey, Synlait, Arla, FrieslandCampina, Dairy Farmers of America, Land O’Lakes, Kerry, Glanbia, Leprino and Fonterra.
McVitty said taking an industry-wide approach to these issues ensures consistent messaging for customers, public and government.
“We are trying to present our sustainability metrics on a consistent basis to buyers who want to see continuous improvement across a broad range of sustainability topics and the Sustainable Dairy Partnership grouping promotes an aligned approach.”
The global industry-focus Sustainable Dairy Partnership provides a sector focus on sustainable management systems, progress and impacts on issues particular to dairy.
Bodies such as the Global Dairy Platform, which is chaired by Fonterra chief executive Miles Hurrell, gives dairy a presence at international sustainability forums such as the United Nations Climate Change Conference and this month’s New York Climate Week conference.
The direction is clear, said McVitty.
“There is increasing customer demand for products supported by emissions and sustainability data credentials in business-to-business relationships.
“Customers are increasingly looking to suppliers to help them meet emission-reduction targets and NZ’s pasture-based farming model is a competitive advantage, but the offshore competition is catching up.”
NZ dairy farmers are fortunate to have vast farm-level data to assist with compliance.
“Farm-level data is a huge advantage for NZ.”
The International Dairy Federation is another global platform promoting sustainable dairy practices, and McVitty pointed out that NZ will host its annual summit in 2026.
More: Wallace is visiting seven countries in six weeks to report on market sentiment, a trip made possible with grants from Fonterra, Silver Fern Farms, Alliance, Beef + Lamb NZ, NZ Meat Industry Association and Rabobank. Read more about his findings here.
