Wopke Hoekstra, the Commission’s climate chief, confirmed the move, stressing the EU’s carbon border adjustment mechanism (CBAM) would provide a level playing field for European fertiliser producers.
CBAM, which covers hydrogen, electricity, fertilisers, aluminium, iron and steel, and cement, places a carbon price on goods imported into the EU – in line with the internal emissions trading scheme on domestic producers.
However, since it came into force, several EU member states have been lobbying Brussels to remove fertilisers from the scheme, warning it could drive up prices for farmers.
Various hydrogen lobby groups and ammonia companies had warned that a suspension could undermine investments into clean production projects using blue and green hydrogen.
Hoekstra said, “Any talk of potentially suspending CBMA only creates uncertainty for the fertiliser industry, which prolongs our reliance on imports from countries such as Russia. It puts new investment opportunities at risk, undermining future growth and development.”
While CBAM will stay in place, the Commissioner acknowledge the price pressure it will add. To cut costs for crop growers, the Commission has proposed a temporary duty-relief on certain fertilisers.
“We proposed a duty relief, temporarily suspending the remaining Most-Favoured-Nation tariffs on ammonia, urea and certain other fertilisers. These measures will help to offset the impact of CBAM,” he said.
“This is a win-win for European farmers and industry alike.”
The move will likely offer more certainty to companies on the verge of investment decisions. In the midst of the suspension talks, fertiliser major Yara warned that the uncertainty clouded decisions on its involvement in Air Products’ major blue hydrogen and ammonia project in Louisiana.
H2 View has contacted Yara for comment on the development.
