A new EU measure called the Carbon Border Adjustment Mechanism (CBAM) is set to directly impact fertiliser and other farm input costs from next January.

The new measure is designed to discourage importers from purchasing goods with higher greenhouse gas emissions from outside the EU by imposing a tax on these imports.

Over 85% of all urea used in Europe is manufactured outside of the EU, with most of Ireland’s urea coming from north Africa.

A spokesman for the Irish Fertiliser Manufacturers and Blenders Association (IFMBA) says that the new tax could add as much as €25 to €30/t to fertiliser prices next year, depending on carbon prices in the emissions trading scheme (ETS) and the origin of the fertiliser.

Worryingly, the tax is set to ramp up and could reach over €240/t by 2034, according IFMBA analysis.

European-manufactured fertiliser will be exempt, as these manufacturers are already operating on the ETS.

Eamonn Farrell from ICOS said it is asking the Irish Government and the EU to pause the legislation.

“There has been no economic assessment done on the impact of the new measure. The fact that the UK, while committing to CBAM, are not implementing it until 2027 means that fertiliser prices will be significantly different either side of the Irish border, which poses a big risk to businesses operating in the south,” he says.

The IFA’s Noel Banville says that there is increasing resistance to CBAM among European farmers, particularly French farmers affected by low cereal prices. The IFA is writing to the minister, recommending the measure to be postponed or for nitrogen fertiliser to be excluded from the scope of CBAM.