Fertilizers Europe releases statement on CBAM

On 17 December, the European Commission published its new CBAM package.

According to Fertilizer Europe, the proposal falls short of delivering a real solution for EU-based exporters. The Temporary Decarbonisation Fund will not address the competitive disadvantage EU producers face on global markets. At the same time, watered down implementation, such as flat 1% markup on default values for fertilizers, will significantly weaken the mechanism and prevent it from delivering on its promises.

“Since its announcement, European fertilizer producers have viewed CBAM as a necessary instrument to equalise carbon costs between EU producers and non-EU competitors. The European Commission deserves recognition for establishing a mechanism that seeks to reconcile climate ambition with industrial competitiveness,” said Antoine Hoxha, Director General of Fertilizers Europe.

In the attempt to push importers to report actual emissions, the Commission introduced an annual markup applied to default values used to calculate the carbon border levy. However, unlike other CBAM sectors, fertilizers would be subject to a flat 1% markup.

Hoxha stressed: “The Commission’s decision to start with the markup for default values at 1% reflects a genuine effort to address farmers’ concerns about the CBAM launch, and we acknowledge that. At the same time, extending a 1% markup on default values indefinitely will discourage the reporting of real emissions by overseas producers – particularly those with a higher footprint than their country’s average. Such watering down of the rules undermines CBAM’s core objectives of fair competition and transparency”.

Beyond methodology, watertight implementation will be critical to the success and credibility of CBAM.

Antoine Hoxha said: “Addressing the risk of circumvention is essential, and the Commission’s announcement is a step in the right direction. The real test, however, will be whether these measures prove effective and enforceable in practice.”

Commenting on the Commission’s non-proposal on exports, Antoine Hoxha underlined: “The Commission proposal falls short of delivering a real solution for EU-based exporters. The temporary decarbonisation fund is just a patch that fails to address the fundamental issue whereby EU made products, often with lowest environmental footprint globally, will be pushed out of international markets due to uneven carbon costs. Such approach will further deteriorate the competitiveness of EU fertilizer producers, undermining sector’s ability to invest in clean technologies”.

Fertilizers Europe has stated that it remains committed to engaging constructively with EU institutions to ensure that CBAM on fertilizers fully delivers on its objectives.

Read the article online at: https://www.worldfertilizer.com/special-reports/18122025/fertilizers-europe-releases-statement-on-cbam/