CBAM and fertilisers: ring-fencing budgets to help farmers reduce their use of mineral fertilisers

The Carbon Border Adjustment Mechanism (CBAM) came into force on 1 January 2026. It is a carbon tax applied at the borders of the European Union to imports of certain industrial products covered by the EU Emissions Trading System (EU ETS). Nitrogen-based mineral fertilisers are included in this initial list of products. To avoid an increase in costs for the farmers concerned, the level of the tax has been reduced for fertilisers, and they may even be temporarily excluded from the scope of the CBAM. Yet, for the climate, but also for France’s strategic independence and food sovereignty, the CBAM will ultimately have to be fully applied to mineral fertilisers. To limit or even avoid an increase in farmers’ fertiliser expenditure, we need public policies – some of which are currently under threat. Ring-fencing budgets for these policies would be a way to support farmers’ incomes and the food sovereignty of both the European Union and France, while reducing the carbon footprint of our food system. 

A CBAM on nitrogen fertilisers would help reduce greenhouse gas emissions, while also strengthening France’s strategic independence and food sovereignty… 

The primary objective of the CBAM is to reduce “carbon leakage” linked to the EU Emissions Trading System (EU ETS). This system increases the cost of EU production subject to it, which can encourage greater imports and thus shift CO₂ emissions elsewhere without reducing them overall. By taxing the carbon content of products imported from non-EU countries at the same level as the carbon price within the EU, the CBAM removes the comparative advantage of imports and contributes both to climate objectives and to the competitiveness of European industries. 

In its initial phase, the CBAM covers so-called “simple” products that are at high risk of carbon leakage. Nitrogen-based mineral fertilisers, widely used in crop production, are among these products. However, on 7 January 2026, the French Minister of Agriculture announced that it had secured the temporary exclusion of fertilisers from the mechanism (retroactive to 1 January). 

Yet, particularly for France, a CBAM on fertilisers would be a powerful lever for strategic independence and food sovereignty. France is the largest importer of nitrogen fertilisers in the EU: in 2024, more than two-thirds of the nitrogen consumed was imported (source 1, source 2), generating a trade deficit of €1.1 billion. While 60% of these imported nitrogen fertilisers come from within the European Union, the remainder mainly comes from Egypt, Algeria, the United States, Russia, and Trinidad and Tobago. Reducing these imports would also reduce our dependence on these countries for a product as strategic as fertilisers for French agricultural and food production. This objective should be even more of a priority in 2026, as the “food sovereignty conferences” required by the Agricultural Orientation Act are due to begin. 

…but risk increasing farmers’ costs if the right public policies are not implemented 

The CBAM increases the cost of fertilisers for importers, and therefore for farmers. The level of the tax has thus been limited for fertilisers, reducing the additional cost to around 7% in 2026 according to the European Commission, and fertilisers may be temporarily excluded from the scope of the tax. However, this additional cost will eventually materialise once the CBAM provisions are fully applied. Without other changes, this would lead to a substantial increase in fertiliser costs for arable farming sectors (cereals, oilseeds and protein crops, etc.), which have already experienced three consecutive years of unfavourable economic conditions. 

This increase in costs is not inevitable. Although it is far from easy, farmers can reduce their use of synthetic nitrogen fertilisers. Consumption has already fallen by 15% since 2020 in response to price increases caused by the war in Ukraine. The draft National Low-Carbon Strategy plans a further reduction of the same magnitude by 2030, and a halving by 2050 compared with 2020 levels. 

Three main, non-mutually exclusive pathways are available to farmers to reduce their consumption of nitrogen fertilisers, outlined here in order of increasing difficulty of implementation:

• Optimising fertilisers use practices, i.e. maintaining or even increasing yields while using less fertiliser but in a more efficient way.
• Replacing synthetic mineral fertilisers with organic fertilisers, in particular livestock effluents but also crop residues.
• Introducing legumes into crop rotations, i.e. adding a legume crop (peas, faba beans, soybeans, lentils, etc.) into the sequence of crops grown on fields (wheat, barley, oilseed rape, for example). These crops have the ability to capture nitrogen from the atmosphere and store it in the soil for the following crop. 

Some of the public policies supporting a reduction of nitrogen fertilisers are under threat and need to be preserved 

Without listing all the barriers to the adoption of these practices, we draw attention to two public policies that are currently under threat, despite being key to removing certain obstacles. 

First, the scheme supporting the structuring of plant protein value chains benefit from very little public funding. Yet this measure is essential, as one of the major barriers for farmers is the lack of sufficiently attractive markets for these crops. Introduced alongside other ecological planning measures in the 2024 state budget, it was initially allocated €100 million in commitment appropriations and €65 million in payment appropriations. These funds were drastically reduced following budget cuts: only €14 million was actually spent in 2024, and no funding was explicitly allocated for 2025 or for 2026 in the government’s initial draft. The government finally announced on 10 January that €30 million would be allocated to the protein plan and two other measures. The same letter also announced €40 million in aid for the most vulnerable arable farming operations; it would be relevant for this aid to steer farms towards low-input systems. 

Second, the implementation of the Arable crops method under the Low-Carbon Label is under threat, notably due to a lack of funding. The Label certifies greenhouse gas emission reductions and CO₂ storage from agricultural and forestry projects, with the aim of securing remuneration from mainly private actors. The arable crops method certifies projects in arable farming and covers, among other things, the three levers described above. However, agricultural projects under the Label are currently facing significant difficulties, notably due to a lack of private funding, which is more often directed towards forestry projects. This tool is nevertheless particularly well suited to providing financial support to farmers while maintaining the objective of reducing emissions, particularly those linked to fertilisers. 

These schemes can be partially financed by private actors, through voluntary or mandatory participation, but they require a minimum level of public funding to be mobilised immediately. In the medium term, once the CBAM is fully applied to fertilisers, all or part of the revenues from this tax could be allocated to these tools, in order to support farmers while improving both our carbon footprint and our sovereignty.