New EU-wide research suggests applying full VAT to meat could quickly reduce food emissions and environmental impacts across European diets.
Applying full VAT to meat products such as beef, pork, lamb and chicken could deliver rapid, low-cost reductions in the environmental impacts of European diets, new research suggests.
The findings come from a new study published in Nature Food by researchers at the Potsdam Institute for Climate Impact Research (PIK), which assesses the environmental footprint of food consumption across all 27 EU member states and evaluates policy options to reduce it through pricing reforms.
VAT reform offers quick policy lever
The most immediate option analysed focutilizes on VAT reform. While standard VAT rates apply to most goods, food is often taxed at a reduced rate. In 2023, 22 of the 27 EU member states applied reduced VAT to meat, effectively favouring consumption of one of the most environmentally intensive food categories.
The modelling displays that applying the standard VAT rate to meat would reduce the overall environmental damage cautilized by food consumption by between 3.48 and 5.7 percent, depfinishing on the impact category. Average annual food spfinishing per houtilizehold would rise by €109, but this would generate an additional €83 in tax revenue per houtilizehold. If recycled through social compensation mechanisms such as per-capita payments, net costs would fall to just €26 per houtilizehold per year.
Diets drive majority of food-related environmental impacts
The study finds that diets account for 23 percent of greenhoutilize gas emissions generated directly and indirectly by private houtilizeholds in the EU. When wider environmental pressures are considered – including nitrogen and phosphorus pollution, land and water utilize, and impacts on biodiversity – the contribution of diets rises to between 56 and 71 percent. Meat consumption alone is responsible for around 28 percent of food-related greenhoutilize gas emissions.
Drawing on representative houtilizehold expfinishiture surveys and an established economic input–output model, the researchers mapped food value chains and quantified their impacts on climate and ecosystems. This allowed them to test policy scenarios that would internalise environmental damage into food prices and influence consumer behaviour.
Charlotte Plinke, PIK researcher and an author of the study, explained:
From an economic perspective, you should add the product-related environmental costs incurred during production to the price.
This would mean that the more CO₂ is emitted, the more expensive it becomes. Implementing such a graduated system for the enormous variety of foodstuffs, however, is very complex and therefore impractical, at least in the short term. That’s why we initially examine a straightforward option that is currently under political consideration: rerelocating tax reductions on meat products.”
In a second scenario, the researchers examined a more comprehensive approach: a differentiated environmental tax on food based directly on greenhoutilize gas emissions. They found that a price signal equivalent to €52 per tonne of CO₂ would achieve the same emissions reductions as rerelocating reduced VAT on meat. By comparison, Germany currently prices carbon for fuel and heating at €55 per tonne, with plans to integrate this into an EU-wide system in 2028.
PIK researcher Michael Sureth, an author of the study, added:
Such a comprehensive price signal would reduce the other environmental impacts, beyond greenhoutilize gases, even a little more than the selective VAT price signal for meat.
And above all, the comprehensive price signal could be enhanced over time in such a way that the policy fully addresses the problems, such as the climate and biodiversity crisis. Of course, this must be accompanied by a correspondingly strong social compensation through the reimbursement of revenues. The net costs of such a differentiated environmental tax on food would then fall to 12 euros per houtilizehold per year. This would be a difficult, long-term project, that’s why our study also describes the option for a quick first step.”
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