EU to turn carbon tax revenues into farm subsidies amid fertiliser crisis, leaked document shows

The European Commission is preparing to usage c taxes collected from manufacture to subsidise farmers struggling with rising fertiliser costs, according to a leaked draught papers seen by Euronews.

Nitrogen fertilisers are produced utilizing earthy gas, which accounts for up to 80% of accumulation costs. European fertiliser accumulation came nether unit pursuing Russia’s penetration of Ukraine and ongoing disruption successful the Middle East, some of which person driven up costs for farmers and increased inflationary unit connected consumers.

Brussels plans to code the occupation by recycling revenues from the bloc’s c market, the Emissions Trading System (ETS), backmost into agriculture successful an effort to curb rising prices linked to the closure of the Strait of Hormuz, done which astir 30% of the planetary fertiliser commercialized passes.

However, the determination could provoke backlash from energy-intensive industries, which are required to pay for the c emissions linked to their production. Agriculture, by contrast, has truthful acold been exempt from the ETS and present appears acceptable to payment from its revenues.

The proposal, which could inactive alteration earlier the Commission unveils it connected 19 May, reflects Brussels’ designation of farmers’ difficulties arsenic good arsenic the strategical value of food security.

Even earlier the struggle successful the Middle East, EU farmers had protested against soaring fertiliser prices linked to the EU’s 50% tariffs connected Belarusian and Russian fertilisers introduced successful June 2025.

Poland, France, Germany, Spain and Italy were among the largest importers of Russian fertilisers earlier the tariffs were afloat implemented. Despite the warfare successful Ukraine, Russia accounted for astir 30% of EU fertiliser imports betwixt 2024 and 2025, according to Eurostat data.

The Commission precocious announced plans to dilatory the phase-out of escaped c allowances nether the ETS for the fertiliser assemblage and different industries — efficaciously allowing them to emit much contamination for longer. The determination is expected to make an estimated further €4 cardinal successful revenues for the bloc’s c market. However, the measurement would beryllium conditional connected the assemblage investing successful much sustainable alternatives.

“Options volition beryllium assessed for a slower trajectory for phasing retired escaped allowances for the fertiliser sector, conditional connected accrued accumulation of bio-based (organic), circular oregon low-carbon fertilisers,” the draught papers states.

The EU enforcement is besides considering utilizing the bloc’s c borderline tax, the Carbon Border Adjustment Mechanism (CBAM), to support European producers from cheaper high-emission imports.

“The Commission volition transportation retired an in-depth valuation of the pass-through of CBAM- and ETS-related costs into fertiliser prices paid by farmers and volition amended the grounds basal connected farm-level terms developments much broadly,” the draught papers seen by Euronews reads.

In January, France and Italy called connected the Commission to exempt c tariffs connected imported fertilisers from the bloc's c borderline tax, which came into unit connected 1 January. They argued that the measurement would assistance sphere European competitiveness for section farmers.

Promoting “lead markets” for greenish fertilisers

In an effort to trim dependencies and diversify proviso chains, the leaked draught besides proposes the instauration of “green ammonia corridors” with countries successful Africa and the Middle East, highlighting however fertiliser argumentation is becoming portion of Europe’s broader geopolitical vigor strategy.

The papers besides shows that the Commission plans to present stronger marketplace monitoring, imaginable strategical stockpiling, c Contracts for Difference (CfDs), and regulatory mandates designed to make “lead markets” for greenish fertilisers.

The Commission acknowledges that Europe’s vigor vulnerability has exposed a unsafe dependency successful fertiliser production, viewing the modulation distant from fossil-fuel-based fertilisers arsenic indispensable some for clime argumentation and for the bloc’s strategical autonomy.

Green propulsion to displacement distant from fossil-based fertilisers

In an open missive sent to six European Commissioners, a conjugation of biology NGOs urged EU leaders to usage the upcoming fertiliser strategy to awesome the extremity of fossil substance dependency successful Europe’s nutrient system.

The groups reason that the bloc’s nutrient information remains susceptible to volatile fossil substance markets, a concern worsened by tensions stemming from the Iran conflict.

“The EU Fertiliser Action Plan indispensable beryllium the turning constituent wherever we halt trying to ‘fix’ a broken, fossil-dependent exemplary and alternatively statesman scaling the agroecological solutions that already beryllium to supply existent resilience and nutrient sovereignty,” said Lisa Tostado, Agrochemicals and Fossil Fuels Campaigner astatine Center for International Environmental Law.

Beyond nutrient information concerns, biology groups reason that the EU’s reliance connected fossil-fuel-based fertilisers has superior consequences for some nationalist wellness and the environment.

According to Center for International Environmental Law, European Environment Bureau and IFOAM Organics Europe, these impacts see h2o contamination and eutrophication, declining h2o prime and biodiversity, ungraded degradation, greenhouse state emissions, ozone depletion and aerial pollution.