For farmers and fertiliser suppliers, this is no longer theoretical. It is already influencing pricing and supply decisions.

Why Fertilisers Are Affected

Fertiliser production, particularly nitrogen-based products, is energy-intensive and carbon-heavy. The EU has included fertilisers within CBAM to ensure imported goods face a similar carbon cost to those produced within the EU under the Emissions Trading System.

In simple terms, higher-carbon fertiliser imports now carry an additional cost.

What This Means for Prices

Importers must purchase CBAM certificates reflecting the carbon intensity of the fertilisers they bring into the EU. Those additional costs are unlikely to be absorbed entirely within the supply chain. In many cases, they will filter through to merchants and ultimately to farmers.

For arable and mixed farms, where fertiliser represents a significant proportion of input costs, even modest increases can affect margins.

Nicola Massey, Agriculture Partner at Forrester Boyd, Chartered Accountants, explains:

“Fertiliser is one of the largest controllable costs for many farm businesses. When additional charges are introduced further up the supply chain, it rarely takes long before that pressure is felt at farm level. Understanding how these changes influence margins is becoming increasingly important.”

Pressure on Suppliers

CBAM also introduces new reporting obligations. Suppliers must now evidence the embedded emissions in their products. Carbon data, traceability and verification are becoming part of standard commercial conversations.

Over time, lower-carbon fertiliser producers may gain a competitive advantage. Those with higher-emission production processes could find it harder to compete where carbon costs are reflected in pricing.

Why UK Farmers Should Pay Attention

Although CBAM is an EU mechanism, UK fertiliser supply chains are closely connected to European trade. Changes in EU demand and pricing can influence wider global markets.

The UK Government has also confirmed plans to introduce its own CBAM-style system from 2027. Carbon pricing is increasingly becoming part of the cost of trade.

Since 1 January 2026, carbon costs have been built into fertiliser imports into the EU. The impact will vary depending on sourcing and supply routes, but the direction is clear.

For farmers, this is about protecting margins. For suppliers, it is about compliance and competitiveness. Carbon is now a commercial factor within fertiliser pricing, not just an environmental one.

Talk to our Agriculture team today about how we can assist you.