Just two months into 2026 and already it seems the effects of the EU’s Carbon Border Adjustment Mechanism (CBAM) have been felt. The CBAM – a carbon tariff on the import of emissions-heavy products – hung over the fertilizer industry for a while before finally going into effect on the 1 January 2026. Since then the European fertilizer market has seen a massive drop in imports which has not been helped by the additional burden placed on the market by sanctions against Russia and Belarus: two major fertilizer exporters.
The impact of CBAM and rising global tariffs has been dramatic to say the least. Nitrogen fertilizers in particular have been hit hard with imports falling to just 179 877 t in January 2026, down from 1.18 million t in the previous year.1 This is especially concerning when you consider that nitrogen fertilizers make up approximately 46% of total EU fertilizer use, with over 30% of that volume being imported.1 The threat of these extra costs imposed by CBAM have clearly proven enough to encourage extreme caution when choosing to import fertilizers to the EU. Such a massive drop in the fertilizer supply is sure to have a negative knock on effect.
Certainly, the situation hasn’t been helped by the confusion around how the CBAM is to be implemented and, most importantly, what exceptions can be made for critical goods such as fertilizers. In part this confusion stems from public statements by EU officials that suggest fertilizer could be rendered exempt from CBAM due to ‘emergency provisions’. In December, the European Commission proposed a new Article 27a for the CBAM law, an ‘emergency brake’ aimed at addressing ‘serious and unforeseen circumstances’ that could affect the price of goods.2 On 8 January, EU Commissioner Maroš Šefcovic indicated Article 27a could be used to support the agricultural sector, and in a subsequent press conference, suggested it might be applied retroactively from 1 January.2 But as of the end of February 2026 this has only remained a proposal and is yet to see proper implementation despite hopes and rumours to the contrary.
Another factor to be considered is that this comes at a time when the EU is preparing to raise the tariffs on Russian and Belarusian fertilizers while the European Commission has simultaneously proposed a cap on ammonia imports from Russia as part of the 20th sanctions package.1 With this additional limitation, there is an even greater need for EU companies to either import more fertilizer from alternative suppliers – incurring greater fees due to CBAM – or invest in improving domestic production.
The key ingredient to this is uncertainty. It has created confusion and a reluctance to act; industry stakeholders are unable to make well-informed decisions. Naturally, there is a push to exclude fertilizers from CBAM, however, that is perceived as a slippery road since making fertilizers exempt will doubtlessly lead to other industries demanding something similar and thus render the CBAM ineffective. In some ways the mechanism is designed to be punishing and we must remember that it is still in its infancy. It did not come out of the blue as its transitional phase began in 2023. There has been time to prepare. Ultimately, as things stand, the CBAM is unlikely to go anywhere despite the protestations of some industry stakeholders.
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