Farmers' hopes that the UK's planned carbon tax on fertiliser imports would be dropped or delayed in the Budget appear to have been dashed, as the government presses on with the Carbon Border Adjustment Mechanism (Cbam), due from 1 January 2027, Farmers Weekly reports.
Cbam taxes imports in sectors such as fertiliser, aluminium and cement to put them on an equal footing with domestic goods that face stricter carbon costs. The EU introduced an equivalent mechanism at the start of 2026. UK importers will have a year to declare their liability and five more months to pay, after which the tax will be levied quarterly. The NFU has asked for a 12-month postponement, warning of higher costs that could jeopardise food production; fertiliser prices are already up about 35% on a year ago, with ammonium nitrate and urea at £480-£485 a tonne delivered, according to AHDB.
On 16 October HMRC published illustrative figures "based on current and preliminary data", with first rates due before the end of the year and quarterly updates after. It suggested an initial charge of £1.45 a tonne of CO2 equivalent for fertiliser; on the default estimate of 2.6 t CO2e per tonne of ammonium nitrate, that is about £3.77 a tonne. Farmers and traders expressed some relief, as earlier estimates ranged from £10 to £50 a tonne.
Herefordshire farmer Martin Williams warned that the low first-year rate reflects allowances that taper each year. "It really starts to hit from 2030-2035, when the actual Cbam rate will climb from about £13/t to £58/t," he said. "It may not be a big number in 2027, but it gets worse quite quickly."
Photo: Michael Trolove / Wikimedia Commons (CC BY-SA 2.0)
Source: Farmers Weekly
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