Denmark is to roll out a scheme supporting landowners who voluntarily remove agricultural or forestry land from production to reduce emissions.

The European Commission has today (Friday, February 13) approved the €1 billion Danish State aid scheme.

The commission said the measure will contribute to achieving the objectives of the EU's Common Agricultural Policy (CAP) "by strengthening environmental protection and contributing to climate change mitigation and adaptation".

Denmark

Under the scheme, Denmark will support landowners who voluntarily cease agricultural production on their land to reduce agricultural greenhouse gas (GHG) emissions, as well as nitrogen and phosphorus deposits into water courses.

The project involves the "permanent extensification of farming", meaning that the land will not be tilled and no pesticides or fertilisers will be used.

The commission said this will lead to "the restoration of the soil's natural hydrology through the creation of wetlands" which will reduce emissions.

It was noted that projects may support actions such as the creation or relocation of fences to allow grazing to maintain nature and promote biodiversity.

In areas with forestry connected by water to agricultural land, landowners who also cease forestry production may be granted additional compensation.

Under the scheme, forestry land that is permanently set aside cannot be included in forest production again.

This will apply even after a change of ownership, as the scheme aims to achieve a long-term and lasting environmental and climate impact.

Land

Participants in the scheme will be compensated for the permanent loss of income caused by the setting-aside of land and the restrictions imposed.

Eligible costs will include the cost of non-productive investments, along with legal, administrative and survey costs.

The scheme, which will run until December 31, 2030, is part of a Danish initiative to finance "a significant transformation of land".

The EU Commission approved the Danish scheme under EU State aid rules.

The commission found that the measure "facilitates development of an economic activity".

"The measure is necessary and appropriate to achieve the objectives pursued and the aid fulfils the relevant conditions of the agricultural guidelines," the commission added.

Tax

In 2024, Denmark became the first country in the world to introduce a carbon tax on "emissions from livestock".

It will mean that Danish farmers will initially have to pay a CO2 tax of 300 kroner (€40) per tonne of methane an emissions from livestock from 2030.

This will then increase to 750 kroner (over €100) by 2035.