United Kingdom - NFU raises concern over proposed carbon levy on imported fertiliser

The National Farmers Union (NFU) has raised fears over a new carbon levy on some products imported into the UK from 2027 as it could drive up prices for fertiliser.

A union delegation met with Treasury officials to discuss proposals to implement the levy, which was first announced by Chancellor Jeremy Hunt.

The Carbon Border Adjustment Mechanism (CBAM) will apply to carbon-intensive products such as fertiliser, but not other goods such as food or agricultural products.

The charge applied will depend on the amount of carbon emitted in the production of the imported good and any gap between the carbon price applied in the country of origin and the carbon price faced by UK producers.

The UK's key trading partners such as the EU are also introducing such systems, but prices within the schemes may vary and many regions have no carbon pricing at all.

Announcing the plans, Mr Hunt said: ″This levy will make sure carbon-intensive products from overseas face a comparable carbon price to those produced in the UK, so that our decarbonisation efforts translate into reductions in global emissions.″

However, the NFU said if feared any import levy would drive up prices for fertiliser, a crucial input that helps farmers and growers produce food.

This had the potential to undermine the competitiveness of domestic food production against imported food, the union said.

Imported food is usually produced using cheaper and potentially less sustainable inputs which are not subject to an equivalent carbon price.

The NFU added that this risked displacing domestic food production with less sustainable food imports.

The union's chief economic adviser, Rohit Kaushish said: ″The cost of producing food has been soaring and putting many farmers and growers under immense pressure.

"Measures such as the CBAM which target decarbonisation of parts of the economy must ensure they do not undermine the sustainable transition of our domestic food system.

″It’s crucial the industry has access to better market data on fertilisers to enhance decision making on production, greater support to transition to more sustainable approaches to crop nutrition and the establishment of core production standards for imports to uphold standards in our domestic market.″