Nitrogen fertiliser prices could double by 2030 as a result of the EU’s Carbon Border Adjustment Mechanism, a form of EU carbon tax, according to a new study highlighted in the Irish Farmers Journal.

Speaking about the findings, journalist Declan O’Brien explained that economists at the Thünen Institute in Germany examined how CBAM, an environmental levy on imports, would affect fertiliser production, prices, and ultimately farm incomes across Europe.

The study suggests that while CBAM is designed to protect European fertiliser manufacturers and retain around 80% of production within the EU, it will significantly reduce cheaper imports. Fertiliser imports into the EU are forecast to fall by 37%, as non-EU producers divert product to markets without such taxes. With supply tightening and demand broadly steady, the researchers predict a doubling in nitrogen fertiliser costs.

For Ireland’s grass-based farming system, heavily reliant on nitrogen, the implications are stark. The study estimates fertiliser usage could fall by 16% in the south and east and by up to 30% in the west and northwest, hitting output and incomes. By 2030, farm incomes could drop by 7.7% across Europe, and by at least 12% in Ireland.

Farm organisations argue that while CBAM looks good on paper, it risks being counterproductive in practice, forcing EU farmers to cut production while food imports grow from regions with lower environmental and food safety standards.