Denmark’s Incoming EU Presidency: A window of opportunity for discussing climate policy in agriculture

2025-06-30

Authors: Laure-Lou Tremblay, Julia Bognar

On 1 July 2025, Denmark will assume the rotating presidency of the Council of the European Union; this comes at a pivotal moment for climate policy. As EU institutions debate the Union’s 2040 climate target, the role of agriculture in delivering emissions reductions is coming into sharper focus. Denmark’s presidency offers a window of opportunity to discuss a forward-looking EU framework for agricultural emissions. 

The Danish Presidency is well-positioned to facilitate this discussion. In 2024, it became the first country to adopt a targeted carbon pricing system for greenhouse gas (GHG) emissions in agriculture. Through a landmark “Green Tripartite Agreement”, the Danish government, farm sector, and environmental groups agreed to a tax on livestock methane emissions, drained peatland, and liming. The mechanism is set to start in 2028, with rates scaling up through 2035. 

What makes the Danish model stand out is its blend of climate ambition with financial incentives and investments for farmers. Methane from livestock will be taxed at 120 Danish krone (€16) per tonne of CO₂e in 2030, rising to 300 krone (€40) by 2035  with a 60% tax rebate to account for current technological limitations and ease the transitional cost burdens. Emissions from drained peatland will be taxed at a lower rate, reflecting their different mitigation profiles. All tax revenues are channelled back into the sector via a Green Land Fund to subsidise the adoption of green technologies, nitrogen-reducing practices, and infrastructure improvements.  

At the EU level, agriculture has so far remained largely outside of binding carbon pricing or emissions trading, despite accounting for roughly 13% of EU GHG emissions. But if the EU is to meet an ambitious emissions reduction target by 2040, Union-wide discussions on potential policy mechanisms to incentivise emission reductions in agriculture are needed. 

Denmark’s presidency comes at a time when the European Commission is actively exploring policy options for agricultural climate action. This policy analysis summarises the range of options currently under assessment in a  study commissioned by DG CLIMA, which will be published in November 2025. These include: 

  • Carbon farming linked to public procurement, in which the EU or Member States would buy certified CRCF units—representing emissions reductions or removals—from a centralised pool; 
  • A mandatory climate performance standard, setting emission intensity benchmarks for major food retailers or processors; 
  • An agri-food emissions trading system (AgETS), where either processors or large farms would be obligated to hold allowances. 

Each option has different implications for cost distribution, administrative burden, and farmer participation. This analysis also explores the enabling factors necessary for effective implementation: robust monitoring systems, safeguards against carbon leakage, and strong support mechanisms such as advisory services, insurance access, and financing tools for sustainable investments. 

Denmark’s presidency offers an opportunity to contribute constructively to this evolving conversation. With upcoming CAP reform discussions, a new European Commission, and mounting pressure to align all sectors with the EU’s climate targets, 2025 offers an opportunity to deepen the policy dialogue on how agriculture can support the EU’s climate objectives

To explore the policy options under consideration and the potential enabling conditions for implementation, see the full policy analysis