The European Commission announced this Wednesday, 17th, that it will increase the carbon tax applied to fertilizers imported at the borders of the European Union (EU) by 1%, with the aim of avoiding a rise in prices in a period of agricultural crisis.
“In view of the agricultural crisis and the difficulties that the sector may face, we have taken an extraordinary measure regarding fertilizers to limit the increase in prices and so that there is no impact on farmers when purchasing and storing imported fertilizers”, announced the European Commissioner for Prosperity and Industrial Strategy, Stéphane Séjourné, at a press conference in Brussels.
The community executive will apply a 1% increase to fertilizers to the so-called “default values”, which serve as the basis for calculating the carbon dioxide (CO₂) emissions of a sector.
The measure responds to the concerns of cereal producers who had demanded the exclusion of imported fertilizers from the European carbon tax regime, fearing a rise in the prices of production factors.
The remaining products covered by the carbon adjustment mechanism at borders (steel, aluminum, cement, electricity and hydrogen) will be subject to a default value of 10% in 2026, 20% in 2027 and 30% in 2028.
“The consequences on the prices of imported fertilizers will, therefore, be extremely reduced”, said the commissioner, indicating that the increase will be shared between the exporter, the importer, intermediaries and farmers.
The objective of the carbon adjustment mechanism at borders is to prevent European producers from facing unfair competition from companies that, abroad, are not subject to the same environmental rules.
The Carbon Border Adjustment Mechanism currently targets base materials such as aluminum, cement, electricity, fertilizers, hydrogen and iron and steel, putting a price on the embodied CO2 emissions of imported products.
This ensures equal treatment of base materials produced in the EU, where an equivalent carbon price is paid under the EU Emissions Trading System (ETS).