Farming the Future: Denmark’s Blueprint for Sustainable Agriculture
This article was written by Sydney Wolfe, a student in my ENVECON 161 class this semester. One of the class assignments is to write a blog on environmental, climate, or energy challenges related to agriculture. I chose the two best submissions to publish here (it was hard to choose only two because there were so many excellent ones). Stay tuned for our second contribution next week.
Sydney is a sophomore majoring in Environmental Economics & Policy and Political Science. She is passionate about the intersection of policy, economics, and sustainability, and plans to pursue a career in environmental law in the future.
This summer, I’ll be studying abroad in Northern Europe spending time in Copenhagen, Denmark. While the city is known for cycling culture and urban sustainability, I’m particularly interested in a quieter movement happening in the countryside: the transformation of Danish agriculture through renewable energy.
Denmark’s approach is an important case study on whether farming can be climate-smart, sustainable, and economically viable.
Denmark’s Ambitious Climate Goals
Denmark’s 2020 Climate Act targets a 70% reduction in greenhouse gas (GHG) emissions by 2030 (compared to 1990 levels) and climate neutrality by 2050. Agriculture, responsible for over a quarter of Denmark’s net emissions, is central to these efforts.
In November 2024, Denmark’s government released the Green Tripartite Agreement, which introduced agricultural policies to promote both sustainability and renewable energy. It includes the world’s first livestock emissions tax to combat livestock methane emissions, as well as measures like restoring 150,000 hectares of carbon-rich lowlands and reducing emissions from nitrogen fertilization.
Tackling Livestock Emissions
Methane accounts for 80% of Denmark’s agricultural emissions and plays a larger role in the nation’s warming impact than CO2 or nitrous oxide (N2O), making its reduction crucial. The figure below shows projected Danish GHG emissions in 2030 in CO2 equivalents (CO2e). Methane’s global warming potential (GWP) is significantly higher in the short term (20 years) than the long term (100 years), while CO2 and N2O remain constant across both time frames.
Starting in 2030, farmers will pay about 300 kroner ($US43) per ton of CO2e exceeding reduction targets, rising to 750 kroner ($US109) in 2035. According to CNN Business, farmers will initially receive a 60% tax break, paying 120 kroner ($US17) per ton of livestock emissions in 2030, equating to 672 kroner ($US96) per cow annually at the lower rate. These amounts are significantly less than the social cost of methane emissions, but larger than the ill-fated livestock tax proposed in New Zealand in 2022.
Although the tax incentivizes emissions reductions and funds green transitions, critics argue it may not significantly curb methane emissions. The EU’s Common Agricultural Policy still heavily subsidizes livestock farming, complicating transitions to lower-emission alternatives. Some farmers worry that the tax will hinder green investments rather than encourage them.
Bioenergy: The Circular Solution
Denmark’s bioenergy sector also plays a crucial role in its green transition. In 2022, renewables comprised 42% of Denmark's energy consumption, with bioenergy making up over two-thirds of that mix, as shown below.
Bioenergy includes biomass (solid organic material like wood chips) and biogas. Biogas production converts agricultural waste such as manure into biomethane, producing renewable energy and reducing reliance on fossil fuels, as shown below. Unlike in the United States, Danish producers increase the productivity of biogas facilities by adding energy crops as inputs to supplement agricultural waste. Biogas production lowers agricultural emissions while contributing to Denmark’s energy supply.
Biogas alone constitutes 15% of Danish bioenergy and is projected to supply 70% of Denmark’s gas consumption by 2030. Production has grown fivefold since 2013 (see below).
Costs and Challenges
Despite its promise, biogas remains expensive. Reducing CO2 emissions via biogas costs about 151 EUR per ton ($US163), requiring subsidies to stay competitive. From 2012 to 2018, Denmark provided generous biogas subsidies to eligible producers, driving rapid industry growth. However, new applications under this program ended in 2018, leaving newer producers with fewer support options.
Denmark now plans to shift to a competitive tender system for biogas subsidies, reducing overall subsidy levels while maintaining incentives for efficiency. Farmers who invested in biogas under past schemes continue to benefit, but newcomers face tighter margins and evolving policy structures.
Biogas plants also face strong local opposition due to odor, noise pollution, and land-use concerns. Using energy crops such as corn, beets and artichokes for biogas competes with food production, leading Denmark to reduce their allowed share from 25% to 12% in 2018. Additionally, improper biogas management can lead to methane leaks, negating its environmental benefits. A 2023 study of 69 Danish biogas plants found leakage rates of methane ranging from 0.3% to 40.6% of production, though mitigation efforts reduced emissions by nearly 50%.
Why Denmark’s Model Works
Denmark’s success stems from strong policy incentives, market-driven green transitions, and financial support. The new “Særpuljer” program provides direct funding for innovation and implementation of climate-friendly food production, biosolutions, and food waste reduction, helping farmers transition without bearing the full cost. Emissions taxes and renewable energy investments further encourage climate-smart farming.
Denmark’s circular approach also creates economic benefits. Farmers gain new revenue streams from biogas production and reduce energy costs, proving environmental responsibility and profitability can coexist. Moreover, the Strategy for Green Jobs in Agriculture invests in workforce training and research, ensuring sustainability translates into real, long-term economic opportunities.
While Denmark’s approach may not be universally replicable, its balance of sustainability and profitability offers a valuable model. Countries with strong policy frameworks, like Germany or the Netherlands, might adapt Denmark’s strategies more easily, while others might need phased transitions or private-sector investment.
In a world searching for climate solutions, Denmark’s quiet agricultural revolution is based on a loud and clear message: sustainability need not be a sacrifice, it’s a smart investment in the future.