EU pushes to ease fertiliser costs and secure Mercosur trade deal

The European Commission has proposed cutting fertiliser import duties in an effort to secure support for a long-delayed free trade deal with the South American bloc Mercosur.

EU Trade Commissioner Maros Sefcovic said fertiliser prices remain about 60% higher than in 2020, despite recent stabilisation, warning that the situation is unsustainable for European farmers. He said the Commission plans to temporarily suspend remaining tariffs on products such as ammonia and urea to ease costs.

The move comes as France and Italy push for fertilisers to be excluded, at least temporarily, from the EU’s Carbon Border Adjustment Mechanism (CBAM), arguing the levy is driving up costs and hurting farmers’ competitiveness. Sefcovic added that the Commission is preparing guidance that would allow a temporary suspension of the carbon border levy on fertilisers if market conditions worsen. He described the step as part of a broader effort to deliver a ‘win-win’ Mercosur agreement that protects EU businesses while addressing agricultural concerns.

French Agriculture Minister Annie Genevard said many ministers had raised alarm over the impact of carbon taxes on fertiliser prices and called for urgent relief. She stressed that imported food must meet the same production standards as EU farmers. Genevard added that the Commission has indicated it is open to suspending the carbon border tax on fertilisers, potentially retroactively from 1 January 2026. She said she raised the issue directly in Brussels, warning that the levy is putting grain farmers under severe pressure and could drive further price increases. The French ministry noted that any suspension would still require formal EU approval, with several other member states supporting the measure.

The Commission hopes these steps could break the deadlock over the Mercosur trade deal, potentially clearing the way for its signature as early as next week.

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