EU ENVI Committee Approves CBAM Extension; Fertilizer Price Support Measures Implemented
The EU Parliament's ENVI committee approved a draft report extending the Carbon Border Adjustment Mechanism (CBAM) to downstream products by 2028, impacting costs for imports and compliance for SMEs. Concurrently, the Parliament approved temporary support for farmers facing rising fertilizer prices due to geopolitical tensions, allowing flexible use of Common Agricultural Policy funds.
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The European Parliament's ENVI committee approved a report extending the CBAM to downstream products, including cars and agricultural machinery, with a targeted implementation in 2028. The current EU carbon price is around EUR 80/tonne, projected to increase significantly by 2030 and 2045, raising compliance costs for SMEs.
Separately, the Parliament has approved temporary measures to support farmers affected by rising fertilizer prices linked to the Middle East crisis, allowing faster payment advances under CAP. Fertilizer costs have surged significantly, with inflation in agricultural inputs reaching 7.6% annually.
The UK's reliance on imported fertilizers poses supply risks and has driven input cost inflation. The situation highlights the interconnectedness of energy and food security, necessitating a strategic approach to mitigate future vulnerabilities.
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