The Danish Economic Council has criticized the Danish government’s decision to postpone the CO2 tax on fisheries by five years, citing concerns about credibility and the potential impact on long-term climate goals. The council’s spring report highlights the risk of creating uncertainty about future tax levels across various industries, which could undermine incentives for investing in climate-friendly technologies.

According to the Danish Economic Council, the postponement of the CO2 tax, which was initially in effect for a little over a month in 2025, poses a risk to the credibility of the government’s climate policy. The council suggests that the decision, made after complaints from fishermen who would have received compensation directly corresponding to the tax level, could discourage companies and actors from investing in climate-friendly technologies, fearing that requirements may disappear.

The Danish Economic Council emphasizes that reduced credibility in the agreed future climate policy can diminish the incentive to make profitable, long-term investments in both existing reduction technologies and the development of new ones. They state that If companies and actors who need to transition do not dare to make the investments early, the overall transition could become more expensive, and the costs of achieving Denmark’s climate goals will increase.

Minister for Food, Agriculture and Fisheries Jacob Jensen defends the postponement, arguing that pressuring the industry with expensive solutions that are not documented to be cost-effective is not sensible. He believes the tax would be too expensive for fishermen, potentially leading to bankruptcies. He also said that negotiations with the parties in the Danish Parliament (Folketinget) are in full swing and expressed hope for an agreement on a common course for Danish fisheries that ensures a competitive, environmentally friendly, and climate-friendly industry.