Letter from Brussels - November 2025

There is growing concern in farming and co-op circles at the impact of the Cross Border Abatement Mechanism (CBAM) regulation, which, in simple terms, is going to result in an increase in fertiliser prices across the board. CBAM is the EU’s tool to put a fair price on carbon emitted during the production of carbon-intensive goods that are entering the EU; and to encourage cleaner industrial production in non-EU countries. Ultimately, it is aimed at mitigating carbon leakage and has been in a transitional phase since 2023. 

But, from January, 2026, next, CBAM will apply and the fear is it will impact the price of CAN and urea. This EU policy is aimed at supporting decarbonisation as part of its Fit for 55 package and overarching ambition to make the EU carbon neutral by 2050. 

CBAM will apply in its definitive regime from 2026, with a transitional phase of 2023 to 2025. 'A food tax' is how those in the fertiliser sector are terming this at a time when food inflation is causing angst while there is ongoing concern about the competitiveness of EU agriculture. It has prompted ICOS and the IFA here in Brussels to highlight these concerns at the highest level of the EU Commission, calling for the immediate postponement of CBAM obligations for fertiliser in 2026 due to the complex and unworkable nature of the regulation. 

The cost of food production remains at elevated levels due to global economic and geopolitical events, resulting in higher food prices for consumers. The inclusion of fertiliser under CBAM effectively translates into a tax on food production that, if implemented, will add to the cost of production at dairy farm level by over a cent per litre.

ICOS Dairy Committee chairperson, Eamon McEnteggart, along with co-ops and other stakeholders, have written to the Minister for Agriculture, Food and the Marine, MEPs and key EU Commission officials highlighting the potential impact of this measure considering for Ireland the key strength is our grass-based production, which needs to access reasonable amounts of fertiliser at competitive prices. Consequently, CBAM will have a disproportionate effect on protected urea compared to other sources of nitrogen, which is completely contrary to our climate policy objectives. It would have unintentional negative consequences for climate targets also. Yet another well-intentioned piece of legislation that might solve one problem but creates another. Welcome to EU policymaking!