By Kate Abnett and Gus Trompiz BRUSSELS, March 30 (Reuters) - The European Commission again resisted a request on Monday by France and other countries to suspend the EU’s CO2 emissions levy on
EU Rejects France's Request to Suspend Carbon Border Tax on Fertilisers
By Kate Abnett and Gus Trompiz
EU Stance on Carbon Border Levy for Fertilisers
Commission's Response to Suspension Requests
BRUSSELS, March 30 (Reuters) - The European Commission again resisted a request on Monday by France and other countries to suspend the EU’s CO2 emissions levy on imported fertilisers, which the governments said would help farmers struggling with high prices.
Addressing a meeting of EU farming ministers in Brussels, EU Agriculture Commissioner Christophe Hansen said high fertiliser prices were a source of concern for the farming sector, but that suspending the carbon border levy "risks worsening the dependency on imports. And therefore we must be very careful on this issue."
Planned Measures and Industry Consultation
The EU is working on a plan to address issues in fertilisers markets, and will convene an “urgent” meeting on April 13 with industry on measures to support European fertiliser production and reduce dependencies, Hansen said.
Alternative Solutions Proposed
Speaking in a news conference after the meeting, Hansen said he would look in to the impact of a possible suspension, but that he believed a better option would be to spend revenue collected by the levy on stabilising prices for farmers.
Background on the Carbon Border Levy
The EU carbon border levy, which launched on January 1, imposes a fee on the emissions associated with imported goods including fertilisers, steel and cement. The system, the first of its kind in the world, aims to protect European industries from being undercut by cheaper products from countries with weaker climate rules.
Member States' Reactions and Economic Impact
Calls for Suspension from France and Others
France, Italy and Croatia are among the countries to call for it to be suspended for fertilisers.
Impact of Geopolitical Events
French Agriculture Minister Annie Genevard said on Monday the disruption to shipments caused by the Iran war was making the situation worse by raising the cost of urea, a key ingredient for fertilisers.
"Production costs have increased, so there is an economic impasse for producers," Genevard said, adding that France was requesting a "temporary" suspension of the levy.
The French government, which has faced regular protests from farmers in the past two years, already requested the exemption for fertilisers in January.
Opposition from European Fertiliser Producers
European fertiliser producers have opposed suspending the levy.
Potential for Future Amendments
While Brussels has declined a short-term pause, EU countries are negotiating an amendment to the border levy which could allow temporary exemptions in future years, once the amendment enters into law.
(Reporting by Kate Abnett in Brussels and Gus Trompiz in Paris; Editing by Matthew Lewis)
