The EU CBAM fertilizer impact is becoming a major concern as the Carbon Border Adjustment Mechanism (CBAM) moves toward full implementation on January 1, 2026. Industry groups warn that this policy could sharply raise fertilizer prices and disrupt supply across the European Union.
EU CBAM Fertilizer Impact Raises Industry Concerns
CBAM will impose a carbon tax on carbon-intensive imports from non-EU countries, including fertilizers, cement, steel, iron, and electricity. The mechanism is currently in a transitional reporting phase, but from 2026, importers must purchase CBAM certificates, significantly increasing costs.
Several key organisations — including farmers’ groups, landowners, feed traders, flour millers, sugar producers, and fertiliser blenders — have jointly raised the alarm. They say the EU CBAM fertilizer impact could threaten the entire agricultural value chain.
Why CBAM May Increase Fertilizer Costs
Arable farmers across the EU are already facing historically low or negative margins, with fertiliser making up 15–30% of total production costs. Prices have risen sharply since 2020, and tariffs on Russian and Belarusian fertilisers have already caused 10–15% price increases across sources.
Industry groups warn that the upcoming tax under CBAM could raise costs by another 10–30%, depending on how the European Commission finalises the calculation rules — which remain unclear.
This lack of clarity is preventing importers from placing new orders, creating a major supply-chain risk.
Supply Risks and Import Dependence
The EU relies heavily on imported fertiliser, with 50% of its supply coming from non-EU countries. Current stocks cover only 60% of next year’s demand, making the region highly exposed to disruption.
Importers say that uncertainty over CBAM obligations could interrupt fertiliser trade, limiting availability for EU farmers at a critical time.
Farm organisations warn that farmers cannot absorb further price increases, creating a “scissors effect” — low margins on one side, rising input costs on the other.
Industry Groups Call for CBAM Delay
The joint statement urges the European Commission to delay CBAM for fertilisers until two key conditions are met:
All technical rules for calculating CBAM costs should be clearly defined and finalised.
Support measures must be put in place to help farmers manage the additional CBAM-related costs.
The groups argue that temporarily exempting fertilisers from CBAM is essential to:
prevent further price hikes,
ensure supply continuity,
protect EU agriculture, and
maintain food-chain competitiveness.
They warn that without action, the CBAM rollout could raise food prices for consumers and threaten the stability of the EU farming sector.
