Published by Global Banking and Finance Review
Posted on January 7, 2026
By Kate Abnett and Philip Blenkinsop
BRUSSELS, Jan 7 - France and Italy are seeking to exclude fertilisers from the European Union's carbon border levy, at least temporarily, saying an exemption is needed to protect struggling European farmers, documents seen by Reuters on Wednesday showed.
The EU's carbon border levy, which came into force on January 1, imposes CO2 emissions fees on imports of steel, fertilisers and other goods to ensure they do not have an unfair advantage over products made in Europe, where producers must already pay for their CO2 emissions.
A draft statement prepared by France and circulated to other EU governments seeking their support called on the European Commission to temporarily postpone or suspend the levy for fertilisers.
"Such a postponement would ease tensions in the crop farming sector and give economic operators time to restore satisfactory fertiliser supply conditions for the 2026 crop year," said the draft statement seen by Reuters.
EXEMPTION COULD HELP FARMERS, HURT EU FERTILISER PRODUCERS
France said it supported the EU carbon border levy but warned that applying it to fertilisers would hike costs for farmers already struggling with weak cereal crop prices and higher costs due to tariffs on Russian fertiliser imports.
Italy's agriculture minister Francesco Lollobrigida, writing to European agriculture commissioner Christophe Hansen, also urged the EU to lift the carbon border levy, known as the CBAM, on fertilisers.
"A suspensive clause on the CBAM effects for fertilisers should be activated as soon as possible, in light of the serious market circumstances and the expected impact on prices," Lollobrigida wrote in the letter, which was seen by Reuters.
EU nations' agriculture ministers will discuss the issue at a meeting in Brussels on Wednesday, convened to convince wavering member states to sign up to a contentious free trade deal with South American bloc Mercosur.
While removing fertilisers from the EU carbon border tariff would ease costs for farmers in Europe, it could deal a blow to Europe's own fertiliser producers, which the border levy was meant to support by preventing them from being undercut by cheaper imports from countries with weaker climate regulations.
(Reporting by Kate Abnett and Philip Blenkinsop; Additional reporting by Gus Trompiz, Sybille de La Hamaide; Editing by Jan Harvey and Joe Bavier)
The EU carbon border levy is a fee imposed on imports of goods like steel and fertilizers to ensure they do not have an unfair advantage over European products, which are subject to CO2 emissions costs.
Fertilizers are substances added to soil or plants to supply essential nutrients, helping to enhance crop growth and agricultural productivity.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
CO2 emissions refer to the release of carbon dioxide into the atmosphere, primarily from burning fossil fuels, which contributes to climate change and global warming.
Agricultural organizations advocate for the interests of farmers and the agricultural sector, providing support, resources, and guidance on issues affecting farming and food production.
Explore more articles in the Finance category
