During the debate in the European Parliament’s Committee on Agriculture, on Tuesday 2 June, on the European Fertilisers Action Plan, a large share of speakers converged on questioning the Carbon Border Adjustment Mechanism (CBAM) as applied to fertilisers. Several MEPs called either for a temporary suspension or for a far-reaching reform of this mechanism (see EUROPE 13870/12)
Herbert Dorfmann (EPP, Italian) pointed out that the three main fertilisers are phosphorus, potassium and nitrogen. For the first two, “the discussion quickly comes to an end”, as Europe is structurally dependent on imports. The debate therefore focuses on nitrogen, the production of which is directly linked to energy. He stressed that the strong financial performance of certain European fertiliser producers raises questions about how the market is functioning. Mr Dorfmann also argued for better use of European renewable energy surpluses to produce hydrogen and, ultimately, nitrogen fertilisers through the Haber-Bosch process. Lastly, he warned about the disappearance of livestock farming in several European regions, reducing the possibilities for making use of organic effluent.
CBAM at centre of debate. Éric Sargiacomo (S&D, French) argued that the €200 million mobilised through the crisis reserve (an amount that will be doubled thanks to a draft amending budget) “is not serious” because this represents around €10 per hectare for cereals (see EUROPE 13874/4). While he considers the plan broadly satisfactory in the long term, he said that the question of CBAM must be raised: without challenging its principle, he referred to the possibility of a temporary suspension for fertilisers, in a crisis context.
Gilles Pennelle (PfE, French) called for the “immediate suspension” of CBAM for fertilisers, claiming that it could amount to as much as €300 per tonne by 2030, a level deemed “unbearable”. He also argued for some international sanctions to be lifted in order to reduce energy costs.
Carmen Crespo (EPP, Spanish) called for the suspension of CBAM and the revision of the Emissions Trading System (ETS), as well as the suspension of customs duties on nitrogen fertilisers from the United States and Trinidad and Tobago.
Céline Imart (EPP, French) considered that CBAM and ETS constitute the “crux of the problem”, turning environmental mechanisms into factors increasing the cost of agricultural inputs.
Carlo Fidanza (ECR, Italian) denounced the fact that, although fertilisers are temporarily exempt from import duties, they continue to bear the costs of the ETS. He called for fertilisers to be excluded from both CBAM and the ETS, stating that only overall consistency would make it possible to preserve European agricultural competitiveness.
Ciaran Mullooly (Renew Europe, Irish) proposed a middle way: if the suspension of CBAM were not retained, its revenues should be fully reallocated to farmers through a dedicated European fund.
Thomas Waitz (Greens/EFA, Austrian) opposed the suspension of CBAM while supporting proposals to tax companies’ excess profits and reduce dependence on mineral fertilisers by means of legumes and agroecology.
“We consider that both ETS and CBAM are central elements of our climate framework”, the Commission representative replied. According to her, the difficulties currently being seen on the fertiliser market do not originate in these two instruments, but in the crisis in Middle East. In that respect, we have already taken a number of measures, including the suspension for one year of customs duties on key nitrogen-based fertilisers, she stated.
Revisions of the ETS and CBAM will take place, the Commission promised. “We will look very carefully, including in these questions, of free allocations and auctioning to see also how these revenues can benefit the further development of the sector”.
Lastly, the Commission will also work on solutions linked to RENURE, digestates and new types of fertilising solutions. (Original version in French by Lionel Changeur)