European Union and U.S. agreed to remove ammonia tariffs, but CBAM restricts U.S. export gains

The deal, approved by the European Parliament on June 16, 2026, eliminates the 5.5% standard import tariff on U.S. ammonia entering the EU. This was one of several agricultural and industrial tariff reductions in the broader bilateral agreement, which had been negotiated in principle since mid-2025 but was delayed by political friction over U.S. threats toward Greenland.

CBAM requires importers to buy certificates covering the carbon emissions embedded in their goods. U.S. ammonia carries a default CBAM value of up to $196 per tonne — reflecting the use of petroleum coke as a production feedstock — which far exceeds what the 5.5% duty removal saves. The net result is that importing U.S. ammonia into the EU remains significantly more expensive than sourcing from Algeria or Egypt, both of which were already tariff-free and face CBAM costs of around $59–62 per tonne.

Independently of the U.S. deal, the EU suspended its standard import tariffs on urea and ammonia from May 30 for one year, following lobbying by French and Italian agriculture ministers concerned about CBAM’s effect on farm input costs. This suspension applies to all origins and is designed to offset some of CBAM’s cost burden. It does not suspend CBAM itself, which some member states have pushed for but the European Commission has rejected.

Algeria and Trinidad and Tobago — both of which supply significant ammonia volumes to Europe — were already exempt from standard tariffs before the suspension. They now face only their respective CBAM costs. Egypt, another major nitrogen supplier to the EU, is similarly positioned. The EU-US deal chiefly benefits U.S. exporters on paper, but CBAM costs neutralize most of that advantage unless individual plants can provide verified, lower actual emissions data.

Not before 2027, according to Argus Media. From 2027 onward, U.S. ammonia producers who can demonstrate actual plant-level emissions data below the default values will be able to reduce their CBAM liability, potentially making U.S. product competitive on a cost basis. Until then, verified-data producers from lower-carbon origins hold the advantage in the European market.