Study: ending VAT breaks on meat could cut EU food-related environmental harm

A study by the Potsdam Institute for Climate Impact Research has found that applying full VAT to meat products across the EU could rapidly and cheaply reduce the environmental impacts of household diets. The paper said animal-based products hold the biggest share of the EU’s ecological footprint related to diet, which it says is responsible for almost a quarter of greenhouse gas emissions, more than half of biodiversity loss and phosphorus pollution, and almost three-quarters of water consumption.

Depending on how additional tax revenues were redistributed, the study found such a VAT change could cost households as little as €26 a year while cutting ecological destruction by between 3% and 6%. Researchers note 22 of the 27 EU member states levy a reduced tax rate on meat compared with their general VAT.

The study cites examples: Ireland’s meat has zero tax compared with a 23% general rate, raw meat in the UK is zero-rated while the standard rate is 20% for some cooked or processed products, and the gap is 20 percentage points in Croatia, 15 in France, 12 in Germany and Italy, and 11 in Spain.

Only Bulgaria, Denmark, Estonia, Latvia and Lithuania tax meat at the general VAT rate. Published in the journal Nature Food on Tuesday, the paper modelled full VAT levies and an alternative carbon price on food.

Key Topics

World, Potsdam Institute, European Union, Vat, Meat, Nature Food