A 10 per cent consumption tax on dairy and meat would slightly reduce Danish emissions, according to the Danish Council on Climate Change. The farming sector calls it double taxation, while organic dairy Thise could accept a tax, but only if imports are covered too.

The Danish government’s plan to halve VAT on food and remove it entirely on fruit and vegetables will increase greenhouse gas emissions, according to a memo published on 23 September by the Danish Council on Climate Change (Klimarådet). The reason is that cheaper food leads Danes to buy more of everything, including meat and dairy.

As an alternative, the council has calculated the effect of zero VAT on fruit and vegetables combined with a 10 per cent tax on dairy products, pork and beef. This would make milk, yoghurt and cheese almost 10 per cent more expensive. The council says it would lower emissions and still save consumers around DKK 1.5 billion a year.

The climate gain is limited, however. It amounts to 0.07 million tonnes of CO₂e a year, around 0.3 per cent of Denmark’s expected emissions in 2030. The council does not recommend the tax.

“No, it is a political choice,” chair Peter Møllgaard tells the Danish food industry news site FødevareWatch.

“Double taxation”
The Danish Agriculture & Food Council points out that, under the Green Tripartite Agreement, farmers will already pay a CO₂ tax on livestock emissions from 2030.

“Together with the CO₂ tax, it would mean double taxation of climate impact and would clearly have negative consequences for the sector,” Martin Kristian Brauer, Director of Economics & Business, tells FødevareWatch.

The organisation also believes the council overestimates how far consumers will switch from meat to fruit and vegetables.

Thise: Imports must be included
Organic dairy cooperative Thise is more open to the idea:

“If a tax on meat and dairy is considered the best measure, then we are on board with that too,” sales and marketing director Petter Aagesen tells Food Supply.

“But if this tax is only imposed on Danish dairy products, we are strongly opposed,” he continues.

Thise also wants any tax to reflect the climate measures each dairy has already taken. Its preferred option, however, is to abolish VAT on organic products altogether.

No tax on the table
Politically, a tax does not appear likely. In a written reply to FødevareWatch, the Social Democrats, who lead the government, said they have no proposals to make food more expensive by introducing new taxes on meat and dairy products.

By Maja Løvstrup
Sources: Danish Council on Climate Change, FødevareWatch, Food Supply (quotes translated from Danish)
Photo: Danish Dairy Board