EU urea, ammonia tariff ruling uncertain

A decision on whether the EU will reimpose import duties on urea and ammonia is likely to be made at the last-minute, amid heated debate and bureaucratic delays.

On 17 June the 6.5pc duty on urea imports and 5.5pc duty on ammonia imports will automatically resume following a six-month suspension — unless the EU votes to extend it. The outcome of that debate remains uncertain due to divisions within the European Commission and a tight deadline forcing unusual, and unpredictable, procedures.

The commission missed its 17 May deadline to prepare a study describing both the impact of the tariff suspension and current market conditions, with sources in Brussels noting it had been busy with emergency Ukraine-related legislation. This report is intended to underpin the commission's decision on the suspension, as well as provide information to key decision-makers. The commission said yesterday it was now preparing the report.

Because of the shorter timeframe for consideration of the report, the commission is also considering submitting the report and its recommendations through an emergency procedure known as "written measures", multiple sources said. This would place the decision in the first available sub-committee of the European Council of Ministers, rather than one with the most relevant experience. As a result the outcome could be unpredictable, sources said.

The case has been hard-fought, generally with importers seeking an extension and with producers on the opposite side. Within the European Commission the issue has been contentious too, sources said, with the Directorate-General for Agriculture supporting the tariff suspension while the Directorate-General for Trade supported the tariff's reimposition.

Since the tariffs were removed, ammonia and urea prices in Europe have fallen by 60pc and 45pc, respectively, but many elements of the European industry continue to face challenges and are generally producing well below historic norms.

By Bede Heren