EU agriculture ministers held meeting in Brussels as fertilizer price crisis tops agenda

The Strait of Hormuz has been effectively closed since late February 2026, disrupting approximately one-third of global seaborne fertilizer trade. The Middle East is a major exporter of ammonia and urea — key inputs for European nitrogen fertilizer production. With those supply routes severed, prices for nitrogen and phosphate-based fertilizers have climbed sharply. The EU’s Carbon Border Adjustment Mechanism, which took effect in January 2026, has added a further levy on fertilizer imports, compounding the price pressure on farmers.

CBAM is the EU’s Carbon Border Adjustment Mechanism — a carbon tariff on imports of carbon-intensive goods including fertilizers from countries without equivalent carbon pricing. It requires EU importers to buy certificates covering the embedded carbon cost of foreign-made products. For nitrogen fertilizers, this adds cost depending on production method and country of origin. Ireland and other member states are calling for a temporary CBAM suspension for fertilizers given the current supply crisis, though officials say such relief would only take effect from 2027.

The EU Fertilizer Action Plan is a package being finalized by the European Commission to address both the current Hormuz supply shock and longer-term structural dependencies. Key elements are expected to include measures to diversify ammonia and nitrogen supply sources, support for strategic fertilizer stockpiling, regulatory flexibility for farmers and incentives for European domestic fertilizer production capacity. Commissioner Hansen has indicated it will be published in the coming weeks. No formal release date has been confirmed.

Countries with large cereal and oilseed sectors are most affected, including France, Germany, Poland and the Baltic states. Fertilizers account for 15–30% of farm production costs depending on the crop and member state. Cereal growers have the least ability to pass cost increases on to buyers, making them the most financially squeezed group. Ireland stressed domestic food security risks, while Greece and Cyprus highlighted particular vulnerability as smaller agricultural economies with no domestic fertilizer production capacity.

Without relief, European farmers face a second consecutive year of severely constrained margins. Commissioner Hansen warned directly that limited fertilizer access could force farmers to reduce application rates or abandon nutrient-intensive crop production altogether. A sustained reduction in fertilizer use across the EU would lower cereal and oilseed yields, tightening European food supply and potentially amplifying global food price pressure into 2027. Ministers have asked the Commission to expedite the Fertilizer Action Plan to provide a clearer near-term response.