A major new study from the Potsdam Institute for Climate Impact Research suggests that applying full value-added tax (VAT) rates to meat products across the European Union could make a measurable dent in the environmental damage associated with diet, highlighting a potential policy lever for tackling climate, biodiversity and pollution pressures. Published in the journal Nature Food, the research finds that removing existing reduced VAT rates on meats like beef, pork, lamb and chicken — which currently exist in 22 of the EU’s 27 member states — could lower the environmental footprint of food consumption by between roughly 3% and 6%, depending on the impact measure considered.
The analysis, which combines detailed household expenditure data with an input-output model linking consumption to environmental impacts, underscores that diets are significant drivers of ecological harm. In the EU, food purchases account for nearly a quarter of households’ greenhouse gas emissions and substantial shares of impacts on land use, water consumption and biodiversity, a disproportionate share of which is attributable to animal-based foods. Under current tax regimes, reduced VAT rates mask much of these costs from consumers, the researchers argue.
If meat were taxed at the standard VAT rate across the bloc, the resulting price increase would raise average annual food costs for households by about €109. However, researchers note this figure could be largely offset — reducing the average net burden to around €26 per household per year — if the additional tax revenues are redistributed to citizens through social compensation mechanisms.
The study also explored an alternative approach: setting an explicit carbon price on food based on greenhouse gas emissions. A differentiated environmental tax calibrated to emissions — estimated at about €52 per tonne of CO₂-equivalent — would achieve roughly the same emissions reduction as the VAT change but could deliver broader environmental benefits while lowering consumer costs further, potentially to approximately €12 per household per year. Such a carbon price would be roughly in line with forthcoming EU-wide pricing plans for fuels and heating.
Authors of the research emphasise that full VAT on meat could be a relatively straightforward first step in internalising the environmental costs of diets into market prices, compared with the political and administrative complexities of establishing comprehensive differentiated pricing across all food products. Nonetheless, they caution that the design and implementation of such policies need careful consideration to avoid disproportionate impacts on lower-income households and disruptions across agricultural value chains.
The policy proposal comes amid broader scientific and policy debate about the role of fiscal instruments in shaping sustainable diets. Independent research has long suggested that tax reforms — such as raising VAT on animal products while lowering it on fruits and vegetables — could yield both health and environmental gains, and could be more effective if paired with other incentives to shift consumption patterns.
Critics of meat taxation argue that it may not address underlying inequities in food access and could burden poorer consumers unless accompanied by social safety measures and subsidies for healthier foods. Supporters say that pricing mechanisms are necessary to reflect the true social and ecological costs of high-impact foods and to meet EU climate and biodiversity goals, including recently adopted food waste reduction targets and broader sustainability commitments.
As EU policymakers prepare for discussions on climate, agricultural and fiscal reforms ahead of 2030 environmental targets, the Potsdam study adds significant empirical weight to calls for reevaluating how VAT and other price signals can be used to encourage more sustainable eating habits.
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