EU announces measures to ensure fertiliser supply and lower costs

The EC’s plans include excluding fertiliser producers from natural gas rationing, providing financial aid for farmers and opening up the international fertiliser trade, according to the 14 November report.

In addition to the short-term measures to support farmers, in the long-term the planned to combat high energy prices by reducing its imports of Russian natural gas and reducing the use of fossil fuel-based fertilisers, Olive Oil Times wrote.

“In the short term, we have outlined actions to ensure the immediate availability and affordability of fertilisers,” Europe’s agriculture commissioner Janusz Wojciechowski wrote in a tweet.

“As key contributors to the food sector, fertiliser producers can be prioritised for continued and undisrupted access to natural gas in the case of rationing,” he added.

EC officials said record high fertiliser prices were due to supply chain disruptions caused by the COVID-19 pandemic and the bloc’s ongoing energy crisis.

On average, fertiliser costs represent around 6% of the share of input costs and up to 12% for arable crop farmers, the EC said.

“Russia’s weaponisation of gas has negative repercussions on the global fertiliser market, impacting farmers and affecting food security across the world. The Commission is taking measures to reduce the pressure on farmers inside the EU as well as outside,” Frans Timmermans, executive vice-president for the European Green Deal, said in the EC’s 9 November statement.

According to EC estimates, fertiliser prices have increased 149% year-on-year since last September.

“As a result, farmers have been delaying and reducing their purchases of these products. This could lead to lower yields for next year’s harvest, and ultimately to higher food prices, with potentially devastating effects on food security, especially in vulnerable regions of the world that are highly dependent on import of such products and with already high levels of food insecurity,” the EC report said.

Europe produced 18.3M tonnes of nutrient fertiliser and consumed 17M tonnes in 2021, according to trade association Fertilizers Europe. A total of 134M ha of agricultural land in the EU is fertilised.

Earlier this year, the EC found that natural gas accounted for 90% of the variable production cost of ammonia, a key component of fertiliser production.

By August, when natural gas prices had peaked in the EU, the industry had shut down 70% of its ammonia production, Olive Oil Times wrote. The bloc attempted to mitigate these impacts by proposing to drop tariffs on imports of ammonia and urea, another fertiliser ingredient.

Fertiliser production is currently running at 50% capacity in the EU, the report said.

Tags: high energy prices, EU, trade, Production, European Commission, imports, Fertiliser, ammonia, natural gas, nutrient