EU parliament committee backs CBAM expansion to 457 products and adds fertilizer fund

The European Parliament’s Committee on Environment, Public Health and Food Safety voted on July 6 to adopt its position on proposed revisions to the EU Carbon Border Adjustment Mechanism, backing an expansion of the scheme to 457 product codes and adding protections for fertilizer producers and users.

CBAM, which entered its definitive phase on January 1, 2026, currently places a carbon price on imports of six carbon-intensive goods, including fertilizers — primarily urea, ammonium nitrate, and ammonium sulfate. The European Commission published legislative proposals in December 2025 to extend coverage to downstream steel and aluminum-intensive products. The ENVI committee’s position goes further than both the Commission’s proposal and the Council’s June position: it pushes the total to 457 product codes, including solar panels, kitchen utensils, heat pumps, and components for electric motors.

Crucially for the fertilizer industry, the committee also moved to broaden the Temporary Decarbonization Fund, a EUR 600 million (approximately USD 660 million) financial support mechanism. The committee’s proposal would make fertilizer producers — specifically urea, ammonium nitrate, and ammonium sulfate manufacturers — and their downstream customers eligible for TDF support, with funding to run from 2027 to 2029. The Commission’s original proposal had started the fund only in 2028 and did not include fertilizer industry users.

The ENVI position, once adopted by the full plenary in September, will go to trilogue negotiations with the Council, with final CBAM legislation expected in late 2026 or early 2027. A CBAM certificate covering Q2 2026 was priced at EUR 75.28 per ton of CO₂ equivalent as of July 6 — marginally below the EUR 75.36 set for Q1.

For fertilizer importers and producers supplying the European market, the expansion signals tightening carbon compliance obligations beyond the current six sectors. The committee also rejected a Commission proposal to allow exemptions during price shocks, arguing instead that affected sectors should have revenues temporarily redirected to them rather than being removed from CBAM’s scope.

Source: Akin Gump