Farmers caution on EU fertilizers carbon tax

A carbon-border adjustment mechanism covering fertilizers but not EU agriculture would be "intolerable", European farmers' association Copa said ahead of a vote in the European Parliament tomorrow.

Parliament's environment committee last month suggested including fertilizers in a carbon-border mechanism, alongside other energy-intensive sectors such as power, refineries, metals and petrochemicals.

The European Commission is expected to propose a carbon measure by the end of June. Officials have not yet indicated whether fertilizers will be among the first sectors covered.

"If a border adjustment mechanism were to be added to this, the price of fertilizers would skyrocket, further increasing the cost of agricultural production in Europe, while making the use of imported food more competitive and attractive," Copa president Christiane Lambert said.

Fertilizers are more expensive in Europe than elsewhere because of EU customs duties and anti-dumping measures that cost European farmers €600mn/yr ($715mn/yr), Lambert said. Including fertilizers but not agriculture in a carbon-border adjustment mechanism would lead to "massive" carbon leakage from European agriculture, she added.

Industry body Fertilizers Europe, together with the steel and cement industries, has called on the commission to propose a carbon border but also to continue existing aid measures aimed at helping European energy-intensive industries cover the cost of carbon payments that their international competitors do not pay.

By Dafydd ab Iago