Experts from “Agrochema”: CBAM tax is coming soon – the farmers bound to get ready for the change

The upcoming introduction of CBAM (Carbon Border Adjustment Mechanism) is one of the most important changes in the European Union fertilizer market. This mechanism foresees imposing a tax on the imported goods depending on the amount of carbon dioxide and starting from 2026 it will also be imposed upon the fertilizers.

The ultimate goal of CBAM is to control the leakage of carbon dioxide. While the manufacturers from the European Union pay taxes for the carbon dioxide emitted to the atmosphere (70–100 EUR per ton), the importers of the fertilizer from the third countries are not subject to such tax or even if analogous tax is imposed in the country of origin, it is significantly smaller. When CBAM is introduced, the imported product will be subject to tax in accordance with the amount of carbon dioxide emitted during the manufacturing of the respectful good, just like the manufacturers from the European Union.

The matter of this tax was one of the most relevant topics during the fertilizer conference “Argus Fertilizer Europe”, which was also attended by the representatives of “Agrochema”.

“Most of the speakers at the conference highlighted that decreasing the amount of CO₂ will become an inseparable part of fertilizer production and supply, therefore, both the manufacturers and the consumers will be liable to adjust to the new normal, since CBAM will most definitely be introduced,” summarised the Head of Sales of “Agrochema” Lina Magilevičienė.

All of the conference participants were convinced that CBAM will have influence upon the increase in prices of the fertilizers imported from the third countries, nevertheless, nobody is inclined to guess the size of the increase.

Another significant moment is the fact that CBAM tax will be calculated at the end of the year, it will be risky for those importing the fertilizers into the EU to sell them with minimal margin (as it has been so far), since at the end of the year, after the calculations of CBAM are made, it might turn out that the sales were unprofitable and generated losses.

“If such a situation is faced, it is possible that since 2026 the amounts of fertilizers imported into the European Union from the third countries will decrease. There are no predictions stating that the fertilizer demand in the EU will change significantly, thus, it is only natural, that the prices of the fertilizers should go up,” such was also the message from the conference conveyed by the Head of Fertilizer Division of “Agrochema”.

How will it impact the farmers?

“It is wrong to assume that CBAM is the manufacturer’s tax exclusively, since it is a direction that now is being followed by the entire fertilizer market, it will also impact the farmers. Those who will pioneer in applying sustainable solutions in their fields, plan their purchases responsibly, manage the risks, will be at significant advantage,” summarised L. Magilevičienė.

The specialists of “Agrochema” encourage to apply the fertilizers as expediently as possible: to carry out soil research, to follow the advantages of the precision agriculture, to opt for fertilizers of high quality only and also seek the composition that would be the best fit for the plants. It is also important not to postpone the acquisition of the fertilizers till the last minute as it can be performed better following a certain plan, in stages.

“The factors are important not only considering from the point of view of the price but also when evaluating accessibility. During the peak season waiting queues get longer just like the deliver terms. We would strongly advise the buyers of fertilizers to take into consideration such factors as quality of the goods and services, guarantees granted by the manufacturer,” prompted the Head of Sales of “Agrochema”.

Autumn fertilization determines spring harvest

Autumn is one of the most important seasons that contributes to the quality of a good harvest. Plants that are properly nurtured before winter will survive the winter more easily, ensure stronger rooting, and grow better.

When phosphorus and potassium fertilizers are applied in autumn, they ensure a stronger root system, improve soil structure, and prepare plants for intensive spring growth.

“Autumn fertilization is much more than just a habit – it is an investment into land fertility. Those who save on fertilizers during autumn work often get poor results in the spring,” explained Sales Manager at “Agrochema” Lina Magilevičienė.

If, however, fertilizer rates were reduced in autumn, it is very important to compensate for this deficiency in spring. Nitrogen fertilizers must be applied on time – in early spring, when plants begin their vegetation and can maximally absorb nutrients.

“We monitor the international tendencies very actively, enhance our knowledge at conferences and during operation, we are ready to consult Lithuanian farmers about the upcoming changes and provide our assistance in choosing the most suitable products for soils of different types. Every kilogram of fertilizers that was used on time and accurately guarantees benefit several times larger,” such opinion based on facts was expressed by the Head of Fertilizer Division of “Agrochema” Algimantas Kazlauskas.