European fertiliser importers are navigating carbon-border costs alongside tariffs, natural gas price volatility and concerns about dependence on a limited number of external suppliers. The combination is increasing the complexity of sourcing decisions as buyers weigh emissions, availability and delivered prices.
Early-2026 ammonia trade data provided a clear indication of changing flows. Shipping figures reported by S&P Global showed EU seaborne ammonia imports at approximately 717,000 tonnes in the first quarter of 2026, down from 787,000 tonnes in the previous quarter. US shipments fell from around 90,000 tonnes to 40,000 tonnes, while Algeria accounted for approximately 30% of first-quarter arrivals. Market participants linked part of the decline in US shipments to the default emissions treatment under the EU’s Carbon Border Adjustment Mechanism (CBAM).
These figures cover seaborne ammonia, not the full range of fertilisers or all EU imports. Ammonia, nitrogenous fertilisers and other goods covered by CBAM have different customs classifications and production routes. Phosphate and potash fertilisers cannot automatically be included in carbon-exposure estimates simply because they are agricultural inputs. Reliable assessments require product-specific classifications and data.
Gas costs and emissions data shape ammonia competitiveness
Natural gas remains a major feedstock and cost component in conventional ammonia production. The emissions profile of a plant depends on factors including operational efficiency, fuel use, the hydrogen production route and the treatment of relevant upstream inputs.
Producers with credible installation-specific emissions data may be able to demonstrate a lower embedded-emissions footprint than the applicable default values would indicate, where the rules permit the use of verified actual figures. Access to reliable production data can therefore affect the comparison between competing suppliers.
The treatment of fertilisers also differs from that of other CBAM sectors. The European Commission’s default-value mark-up for fertilisers is not the same as the mark-ups applied to steel, cement and aluminium. Comparing default-value adjustments across these sectors without accounting for their different rules could produce misleading conclusions about relative carbon costs.
Certificate prices are only one part of the calculation
The third-quarter 2026 CBAM certificate reference price was €82.32 per tonne of CO₂ equivalent. While this price affects the economics of covered imports, it does not establish an importer’s complete liability on its own.
The calculation also depends on applicable free-allocation benchmarks, the emissions figures accepted under the rules and any recognised carbon payments made in the country of production. Importers must consider these factors alongside natural gas supply risks, freight charges, trade-defence measures and any relevant product-specific customs duties.
Consequently, a lower certificate-related cost does not necessarily translate into the lowest overall purchase price. Gas prices, production efficiency and logistics can materially influence the competitiveness of an ammonia supplier.
Trade policy complicates supplier diversification
EU policy towards Russian and Belarusian fertiliser imports adds another variable to procurement decisions. Duties and diversification measures can encourage buyers to seek alternative suppliers, including producers whose emissions advantages may be small or not yet verified.
Changes in trade flows must therefore be interpreted carefully. A declining share for a particular origin does not necessarily demonstrate that CBAM is responsible; tariffs, energy prices, shipping costs and supply availability can also affect purchasing decisions.
Short-term increases in fertiliser prices can create additional political pressure because higher input costs affect farmers’ production budgets. For importers and distributors, this makes it important to distinguish the effects of carbon pricing from those of wider trade and energy-market developments.
Contracting and financing face greater uncertainty
European fertiliser distributors may increasingly need reliable supplier emissions data as part of annual contracting, alongside product specifications, delivery schedules and credit terms. Contracts that provide access to relevant production information could help importers assess potential CBAM exposure and compare offers on a more consistent basis.
Financing inventory ahead of the planting season also requires careful consideration of potential carbon liabilities. Distributors may face a mismatch between the timing of import-related costs and their ability to pass those costs on to farmers, particularly when demand is price-sensitive or supply contracts limit immediate price adjustments.
The result is a more complex procurement environment in which emissions evidence, product availability and financial risk need to be assessed together.
Balancing emissions reductions with supply security
Europe’s objectives of securing affordable fertiliser supplies and reducing embedded emissions do not automatically align. Buyers need sufficient nitrogen products at workable prices, while CBAM creates incentives to account for carbon emissions and, where supported by the applicable rules, favour lower-emission production.
The commercial outcome will depend on the interaction of carbon costs, energy prices, trade measures and the quality of supplier data. Producers able to combine reliable deliveries with verifiable emissions information may be better positioned to establish durable relationships with European customers.
