Brussels – Concerns are mounting over the impact of the European Union’s Carbon Border Adjustment Mechanism (CBAM) on fertilizer supply and affordability, just weeks after its full implementation. Farmer organizations Copa and Cogeca have warned of a potential crisis in agriculture, citing a dramatic drop in nitrogen fertilizer imports. While the EU Commission maintains the situation is stabilizing, the diverging perspectives highlight the complexities of balancing climate goals with food security. The core of the dispute centers on whether the CBAM, designed to prevent “carbon leakage,” is disrupting essential supply chains and driving up costs for European farmers.
The CBAM, a key component of the EU’s “Fit for 55” climate package launched in 2021, aims to ensure that imported goods face a carbon price equivalent to that paid by EU producers. It initially covers carbon-intensive sectors like iron, steel, aluminum, cement, and fertilizers, requiring importers to purchase CBAM certificates. The mechanism began its transitional phase in October 2023, with full implementation commencing January 1, 2026. The goal is to incentivize cleaner production methods globally and protect European industries from unfair competition. Still, the immediate effects on fertilizer imports have sparked a heated debate.
Dramatic Drop in Fertilizer Imports
Data from the European Commission present a significant decline in nitrogen fertilizer imports in January 2026. Imports totaled 190,495 tonnes, a stark contrast to the approximately 1.18 million tonnes imported during the same period in 2025. Copa and Cogeca argue this reduction demonstrates the CBAM’s disruptive impact, warning that it threatens the stability of agricultural production across the EU. They are calling for the immediate suspension of the mechanism, fearing a worsening crisis for farmers already facing economic pressures.
Fertilizers Europe, the industry association representing fertilizer manufacturers, disputes this interpretation. They contend that the import figures are “incomplete and misleading,” suggesting that importers anticipated the CBAM and stockpiled nitrogen fertilizer before the end of 2025. This pre-emptive buying, they argue, explains the sharp decline in January imports. Supporting this claim, EU Commission figures reveal a substantial surge in imports during December 2025, reaching 2.53 million tonnes – the highest monthly volume since records began in January 2014, representing a more than 150% increase compared to December 2024.
Price Concerns and Market Uncertainty
Beyond import volumes, the potential for rising fertilizer prices is a major concern for farmers. Fertilizers typically account for 15% to 30% of a farmer’s input costs, and the arable crops sector is already experiencing negative margins for the third consecutive year. Copa and Cogeca warn that further price increases could push many farms into financial distress. However, initial data from the EU Commission suggest that the CBAM’s impact on prices has been limited so far. In January 2026, the price of nitrogen fertilizers rose by 8 euros to 405 €/tonne, while prices for potassium and phosphate fertilizers remained stable or even decreased slightly.
Fertilizers Europe maintains that any price increases attributable to the CBAM will be moderate. Analyses from the French Environment Ministry, cited by the organization, suggest a potential surcharge of 45 €/tonne for urea, translating to an approximate 8% increase at the farm gate. However, the industry group emphasizes that market instability is primarily driven by uncertainty surrounding the CBAM itself, particularly the prospect of a retroactive suspension, which they say has created unpredictability and destabilized the market.
EU Response and Mitigation Efforts
Responding to farmer concerns, the EU Commission has reportedly already lowered the CBAM levy on fertilizers. EU Trade Commissioner Maroš Šefčovič announced in January that further measures to mitigate price increases are under consideration, including potential reductions in tariffs on ammonia and urea. However, existing special duties on Russian fertilizers will remain in place. The Commission has also signaled plans to release an action plan for fertilizers in the second quarter of 2026 and recently granted exemptions for nitrogen derived from animal manure (Renure).
The debate over the CBAM and its impact on fertilizer supply underscores the challenges of implementing ambitious climate policies while safeguarding food production. While the EU aims to promote sustainable practices and reduce carbon emissions, ensuring a stable and affordable supply of essential agricultural inputs remains a critical priority. The coming months will be crucial in assessing the long-term effects of the CBAM and determining whether adjustments are needed to strike a balance between environmental goals and the needs of European farmers.
The EU Commission is expected to publish its action plan for fertilizers in the second quarter of 2026, outlining further steps to address concerns about supply and affordability. Farmers and industry stakeholders will be closely watching for details on potential tariff adjustments and other measures to mitigate the impact of the CBAM.
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