EU farmers should pay for their carbon emissions, says Denmark

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EU farmers should pay for their greenhouse gas emissions, Denmark’s climate minister has said, as Brussels struggles to rein in a sector projected to become the bloc’s biggest polluter by 2040.

Lars Aagaard said in an interview that the farmers deserving “most success on the European market” should be those who emit the least carbon per tonne of food produced. This could be achieved by charging them for their emissions under the bloc’s cap-and-trade emissions trading system (ETS), which already covers power generation and heavy industrial sectors.

“We should start to discuss how we can get a pan-European regulatory framework . . . putting the agricultural sector into something similar to the ETS,” Aagaard said.

Denmark is among a group of countries pushing for the EU to set an ambitious target of cutting the bloc’s emissions by 95 per cent by 2040 compared with 1990 levels. Aagaard said this would not be achievable unless pollution from farms was reduced.

“We need to find a way we can transform the agricultural sector like other industries, and it’s not easy. It will not be done in the short term,” he said.

EU officials have said that policymakers are looking at ways to include agriculture in the ETS, which since 2005 has helped reduce emissions in the power sector by 37 per cent, according to the European Commission.

Denmark’s government is discussing a carbon tax on its own beef and dairy production, which it has said is key to meeting its own climate targets. It would be only the second country in the world after New Zealand to introduce such a levy.

Policymakers in Brussels have periodically attempted to deal with pollution from agriculture. The sector is the third-biggest emitter of greenhouse gases in the EU but is set to become the largest by 2040 as other industries decarbonise at a faster rate.

But there has been little progress so far. Agricultural emissions from the sector only declined 3 per cent between 2005 and 2021, according to figures from the European Environment Agency. This compares with a 7.6 per cent fall in the transport sector and a 31 per cent drop in emissions from buildings over the same period.

Reductions are not expected to increase before 2030 on the basis of measures currently in place in member states.

Farming is seen as a politically sensitive sector given the strength of the agricultural lobby in Brussels and fears that forcing it to become more sustainable will prompt protest movements, such as the BBB farmers’ party that won most votes in local elections in the Netherlands in March.

The BBB led opposition to The Hague’s efforts to cut nitrous oxide pollution, which is exacerbated by the use of nitrogen fertilisers.

Attempts to add transport in the agricultural sector to the ETS when it was revised last December failed, and an effort by Brussels to include large farms in the bloc’s new rules on industrial emissions are likely to be watered down after heavy resistance from EU member states.

No new measures will be introduced before next June’s EU elections, after which a new European Commission will be appointed.

Among ideas being floated by policymakers include making supermarkets pay for carbon emission permits related to the food they sell, in the hope that would prompt them to source goods produced with the lowest emissions. However, the fragmented nature of the sector and the number of small producers would make verification a challenge, officials close to the discussions said.

Aagaard acknowledged that there was “a risk” that forcing farmers to pay for emissions would favour larger, industrial-level farms, saying: “I’m sure . . . not all farmers or agricultural activities would benefit from such a system to the same extent.”