The Danish fishing industry is set to become one of the big losers with the introduction of a CO2 tax says a newly published expert report
Although Danish fishing industry accounts for less than 1 percent of Denmark’s total CO2 emissions, the fishery is set to become one of the big losers with the introduction of a CO2 tax.
This was stated in an expert report presented on Tuesday, 08 February. Danish fisheries organisations claim that the CO2 tax must be introduced in a sensible way and at the right pace for the sake of the fishing industry, the green transition and cohesion.
On Tuesday, the government’s expert group has presented its proposal for a uniform CO2 tax that, in itself will hit Danish fisheries hard. The experts themselves point out that fishing is likely to be hit hard as one of the industries that “significantly limits production or shuts down when the CO2 tax is introduced”.
According to the expert report, the average burden for a commercial fisherman will be a 4-5 times heavier CO2 tax burden than, for example, agriculture, which has been considered particularly vulnerable in relation to a CO2 tax. In fisheries, the scheme will have far-reaching consequences, as a third of the fishery will become unprofitable if the scheme becomes a reality.
“The fishing is under pressure, and this is going to push many Danish fishermen over the edge. It’s a huge extra cost, and we simply cannot handle it. It will have major negative consequences for the fishing industry, for the processing industry and the many local communities where fishing plays a special role, if we do not carry out this exercise at a pace where fishing can keep up,” says Svend-Erik Andersen, chairman of the Danish Fisheries Association.
No alternative fuels
Despite the fact that there are great prospects for new sustainable fuels, there is still a long way to go before Danish fishermen can fill the tank with sustainable fuels. Therefore, they have no option but to adjust and there is no option but to pay the tax. This means that the business base disappears for many fishermen, while the remaining group finds it significantly more difficult to make investments in new green technology because the capital base is eroded by the CO2 tax.
A study from the University of Aarhus carried out for the Danish Maritime Authority shows that even the cheapest alternative (methanol) will be very expensive. Current so-called shadow prices for conversion to methanol are over DKK 2,000 (€268.80/£226.72) per tons of CO2. This means that it is 5-10 times as expensive to reduce CO2 in the fishery as in the rest of society.
“When you drain a business of capital, there is no money to invest in green conversion. And then it ends up with the CO2 tax closing down the fishing industry and stretching the legs for investments in green development. It is exactly against the intention,” says Fridi Magnusen, chairman of the board of the Danish Pelagic Producers’ Organisation.
“It is crucial that we are listened to. Because even though it is a difficult exercise, and we have a lot at stake, we are ready for a constructive collaboration on how the CO2 tax can be arranged so that the fishery can handle it and so that it promotes the industry’s green transition, says Svend-Erik Andersen.