Digest: Negotiating reform – what Denmark’s tripartite agreement says about the politics of food system change

A 1 per cent rise in food prices is what consumers in Denmark are likely to pay as a result of the new CO2 tax on agricultural emissions. The tax sits within a much broader Green Tripartite Agreement signed in 2024, which regulates nitrogen pollution by catchment, takes around 15 per cent of agricultural land out of intensive production, invests in plant-based food and funds a just transition for farmers and farm workers. That 1 per cent figure is part of an empirical response to an issue that has stalled agri-food reform across much of Europe: identifying what it would actually cost to align farming with climate, nature and just transition goals at once.

Denmark, David Baldock told our audience, is ‘absolutely a leader’ in negotiated agri-environmental reform, and ‘exceptional’ in Europe in bringing emissions reductions, land-use change and food system policy into a single coordinated package. But it’s much harder to know whether Denmark is in fact leading the way, or simply going it alone. 

This installment in Root and Reason’s resilience webinar series follows events on food shocks as a solvency risk and what climate inaction could cost the UK food system. Simone Højte of CONCITO set out how the Green Tripartite Agreement came together and what it does. David Baldock of IEEP addressed the comparative question of what is and isn’t transferable to the UK.

Quick Take

• Integration is the achievement. Several European countries have set agricultural emissions targets, but Denmark is distinctive in pricing those emissions and bringing together a CO2 tax on livestock and peatlands with an emissions-based nitrogen regime, the conversion of around 15 per cent of agricultural land, public funding for plant-based food, and just transition measures in a single, coordinated deal rather than as individual, and potentially competing policies.
• The terms were negotiated, not imposed. A clear political mandate to price agricultural emissions was the trigger, but the deal’s substance was negotiated through long tripartite talks between farmers, industry, labour unions, environmental groups, local government and national government, with supporting knowledge partners, including CONCITO. The Agriculture and Food Council was initially reluctant, but concluded it had more to gain by being involved than resisting from outside.
• The enabling conditions are economic and political. Strong public finances, a strong farm balance sheet, and a €1.3 billion contribution from the Novo Nordisk Foundation all helped. But so did Denmark’s culture of collective bargaining, its history as a frontrunner on nitrate regulation, and a public and political readiness to treat agricultural emissions and nitrogen pollution as issues the sector must help to resolve.
• Industry and labour unions brought agriculture to the table. A striking feature of the negotiation is that other Danish industry groups and labour unions wanted agriculture to deliver its share of emissions reductions, because if agriculture does not, other sectors have to. That cross-sector political pressure with agriculture as one part of a national emissions budget that everyone is sharing is consequently what the UK currently lacks.
• The deal is honest about what it doesn’t do. Biodiversity gains are incidental rather than designed, animal welfare and pesticide regulation are left out, and there is no broader food strategy on healthier diets. Some of these issues are already being drawn into the next political cycle: the 2026 election was called the ‘pig election’, for its focus on pork production standards, but the model as it stands is integrated, not comprehensive.

Deep Dive

What the deal contains

The headline instrument of the agreement is a CO2 tax, but there are in fact two taxes involved. One applies to methane emissions from livestock, principally dairy and pigs; the other to drained peatlands. The livestock tax begins in 2030 at a marginal rate of €40 per tonne of CO2 equivalent (CO2e), with a rebate that brings the effective rate down to €16. The rate rises in 2035 to €100 marginally and €40 effectively. The rebate is structured to reward farms that adopt practices and technologies that cut emissions, rather than acting purely as a punitive instrument.

Alongside the tax, the agreement introduces a new emissions-based nitrogen regime. Where the existing system regulates nitrogen inputs per farm, the new regime sets tradable quotas for nitrogen leakage at the level of water catchments, with 23 local tripartites determining which land within each catchment should be converted out of intensive production. Those local tripartites submitted their conversion plans in January 2026, so the implementation phase has only just begun. 

A Green Land Fund of €5.4 billion (2024–2040), supplemented by a €1.3 billion contribution from the Novo Nordisk Foundation, finances the land conversion for an estimated 15 per cent of Danish agricultural land moved out of intensive production into wetlands, forestry or extensive use. In scale and specificity, the land-use commitment through afforestation, peatland rewetting, conversion of nitrogen-sensitive land to extensive use or nature is amongst the most ambitious in Europe, though as Højte pointed out, the design does not yet target biodiversity gains with the precision the scale of land conversion would allow. Still, it’s a useful measure of how far the UK has to go on its own Land Use Framework and farming roadmap.

Two further elements round out the package. Additional funding for the existing Plant-Based Foods Grant brings annual support to €13 million, intended to stimulate both supply and demand. And €13.4 billion is allocated for re-skilling farmers and farm workers, with new employment pathways identified in forestry, nature management, plant-based food production, and local food systems. The Ministry of Finance projects emissions reductions of 1.8 Mt CO2e by 2030, rising to 3.3 Mt by 2035. The structural component, which is output decline, falls from 29 per cent of the reduction in 2030 to 18 per cent in 2035, as technology and practice change pick up more of the burden.

Why it was politically possible

The most consequential enabling condition is one Danish observers tend to mention last: the agriculture constituency is politically weaker than its UK equivalent. The historic farmer party has fragmented into three, only one of which is now narrowly focused on farming interests, and the sector does not command the kind of institutional reach in national politics that its equivalent does in the UK. The political cost of acting on agricultural emissions was, in effect, far lower than it would be in the UK.

That structural reality also aligned with two further conditions. The first was a strong public balance sheet: GDP growth since 2021 created the fiscal headroom for the agreement’s substantial public spending, and the Novo Nordisk Foundation provided an unusual private sector complement. The second was a strong agricultural balance sheet: operating profits in the sector had been positive since the late 2010s, meaning farms had the financial capacity to absorb transition costs. As David Baldock put it, the negotiations were not closed down by a tight, preordained budget and the government was willing to keep adding money to keep farmers at the table.

The deeper enabling conditions are cultural. Denmark has a long history of negotiated agreements within the labour market, and has been a frontrunner on nitrate regulation for years, giving it both the cultural foundation of trust and pragmatism, and the technical evidence base to make tripartite deal-making credible. And the environmental impact of agriculture is more publicly visible in Denmark than in the UK, partly because agriculture makes up 59 per cent of land use in Denmark, nitrogen pollution has survived and been a sustained political issue for decades, and partly because other sectors’ emissions share is unusually high. That perception licensed political parties to take agriculture on, and it shifted the negotiating posture of industry and labour unions, who pressed agriculture to deliver its fair share of national emissions reductions because, otherwise, their sectors would have to do more.

What the deal leaves out

For all its breadth, the agreement is integrated rather than comprehensive. Some of the gaps reflect choices about scope: animal welfare and pesticide regulation were both major issues in the 2026 national election, but sit outside the deal and will need other political instruments. Others reflect the limits of a producer-side agreement in that there is no broader food strategy: investment in plant-based supply is included in the agreement, but the demand-side levers on healthy diets, public procurement and the retail environment are not.

The retail and processing sectors, too, were largely absent from the negotiation. Højte explained that the dairy giant Arla, which produces across seven countries, resisted the agreement more strongly than the farmers’ organisations, on the grounds that national legislation complicates cross-border production. Højte observed that the supply-chain dimension of food system reform in the form of what retailers and processors might be asked to contribute is the conversation that hasn’t happened yet.

What now?

The lesson from Denmark is that bold, integrated reform is politically possible when the right enabling conditions are deliberately built and when some of those conditions are within reach. Cross-sector pressure on agriculture to deliver its fair share of emissions reductions is one, and transparent, quantified evidence on costs and trade-offs is another. So is a credible, funded just transition, rather than asking farmers and farm workers to absorb the cost of change alone.

These are the conditions our Roadmap for Resilience sets out for the UK: long-term policy that outlasts a single parliament, cross-sector forums that build consensus before crisis forces it, and a transition that takes legitimacy seriously. Denmark offers a working example of what a negotiated, integrated agreement looks like in practice in terms of the instruments, tradeoffs, public spending and projected impacts. The UK can learn much from both the process and the results.