EU Commission to Issue Measures Addressing Fertilizer Costs

Europe is preparing an emergency response to a sharp rise in fertiliser costs, as the European Commission readies a package of measures aimed at easing pressure on farmers after disruption in the Strait of Hormuz choked supplies of key ingredients.

Among the steps under consideration is liquidity support for farmers, alongside more flexible advance payments under the Common Agriculture Policy (CAP), allowing them to cover bank loans and meet debts owed to fertiliser suppliers, according to a draft Fertiliser Action Plan seen by RTÉ News.

Ammonia and urea, the main ingredients used in artificial fertiliser, are currently being delayed in the strait because of the US-Israeli war on Iran.

Roughly 20% of worldwide supplies of both materials usually move through the waterway.

The Commission said nitrogen fertiliser prices in April were more than 70% above average levels recorded in 2024.

Around one fifth of global supplies of the two ingredients normally transit through the Strait of Hormuz

According to the draft, the action plan will combine immediate support for farmers facing affordability and supply pressures with a longer-term reshaping of the fertiliser sector, including greater use of domestically produced and organic fertilisers.

The Commission plans to draw on existing emergency funds within the CAP to “provide fast relief for farmers”.

It is also proposing that fertiliser producers, farmers and other stakeholders would “make mutual voluntary commitments to ensure the availability and affordability of home-grown fertilisers for EU farmers, improve predictability for both producers and users through voluntary contractual relations, and support the decarbonisation of the EU fertiliser industry”.

Last month, the Commission said it would loosen the EU’s state aid rules so member states could respond to the immediate effects of the energy crisis, with added flexibility now set to be directed at the fertiliser sector.

Member states will be urged to increase funding “within existing CAP envelopes” to develop new eco and climate schemes designed to improve fertilisation efficiency, encourage the use of recycled nutrients and “strengthen farm resilience”.

The draft plan also says national governments can tap existing Covid recovery and cohesion funds to back biogas and biomethane production.

IFA President Francie Gorman said the Carbon Border Adjustment Mechanism has added almost €900m to farmers’ costs in 2026

“Biogas can reduce dependency, generate additional income for farmers, create local value in rural areas and strengthen resilience through circular solutions for energy and recycled nutrients,” the draft said.

The Commission also suggests that member states could activate the Internal Market Emergency and Resilience Act (IMERA), a Covid-era mechanism that could result in fertilisers being classified as “crisis-relevant goods”.

That would bring “enhanced monitoring, joint procurement, targeted information requests” aimed at speeding up availability and boosting domestic production capacity.

The Irish Government has pressed the Commission to exempt fertiliser from the EU’s levy on carbon-intensive goods imported into the single market from outside suppliers, known as CBAM, or the Carbon Border Adjustment Mechanism.

The tax, which took effect on 1 January, has further increased fertiliser costs.

However, it is understood that while the Commission has floated some flexibilities in how CBAM applies to fertilisers, it has declined to suspend the measure entirely.

The Irish Farmers’ Association (IFA) responded angrily to a leaked version of the Fertiliser Action Plan.

“We estimate that CBAM will cost EU farmers almost €900m in 2026. The Commission imposed this tax on farmers and has refused to reverse course despite the price of fertiliser more or less doubling in price.

“One would be forgiven for thinking that there are some in the Commission who welcome the massive increase in fertiliser prices. It’s hard to think any differently given their inaction on CBAM,” IFA President Francie Gorman said.

He added: “Based on leaked versions of what will be announced tomorrow, the Commission’s Fertiliser Action Plan will do absolutely nothing to address either the availability or price of fertiliser.

“To consider publishing a Fertiliser Action Plan and not address CBAM is quite incredible. One would have to question if the Commission has any interest at all in addressing the price or availability of fertiliser across the EU.”

Mr Gorman is due to join a protest by the pan-EU farming organisation COPA at the European Parliament in Strasbourg.

The European Commission will present the action plan in Strasbourg as the European Parliament’s monthly plenary session begins.