EU farm organisations have attacked a European Parliament proposal to redirect part of the revenue from the Carbon Border Adjustment Mechanism (CBAM) to farmers, calling it "little more than a sticking plaster".

Earlier this month Parliament narrowly voted to scrap a safeguard that would have allowed fertiliser to be removed from CBAM in exceptional circumstances threatening EU markets, and proposed instead a temporary mechanism, the Temporary Decarbonisation Fund, that would channel CBAM revenue to affected sectors. CBAM requires importers of fertiliser and other goods to buy certificates.

Copa-Cogeca, the EU umbrella group for farm organisations, called dropping the safeguard "simply incomprehensible" when fertiliser prices are high and geopolitical tension is squeezing energy and fertiliser markets. Fertilisers are among the largest input costs in EU agriculture and for many arable farmers the biggest, it said, warning that higher production costs will reach food prices.

The group noted that the fund would last only two years while CBAM is permanent, with costs expected to rise until 2034, and said that with Parliament's position and a Council position "that offers little more", farmers had few reasons to expect a meaningful solution from the coming negotiations.

Photo: Andy Beecroft / Wikimedia Commons (CC BY-SA 2.0)

Source: Agriland