EU to turn carbon tax revenues into farm subsidies amid fertiliser crisis, leaked document shows

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🗞️ Driving the news: The European Commission is reportedly preparing a plan to redirect revenues from the EU Emissions Trading System (ETS) into subsidies for farmers hit by soaring fertiliser and energy costs

🔭 The context: Nitrogen fertilisers rely heavily on natural gas, which can account for up to 80% of production costs
• The closure of the Strait of Hormuz and ongoing geopolitical instability have sharply disrupted global fertiliser trade and intensified price pressures across Europe
• Brussels now appears ready to recycle part of carbon market revenues into agricultural support and green fertiliser development

🌍 Why it matters for the planet: The proposal reflects a major strategic shift in European climate policy: using carbon pricing revenues not only to decarbonize industry but also to protect food security and accelerate the transition toward bio-based and low-carbon fertilisers
• It also underscores the growing overlap between climate policy, industrial competitiveness and geopolitical resilience

⏭️ What’s next: The Commission is expected to unveil the proposal on 19 May
• The draft also suggests slower phase-outs of free ETS allowances for fertiliser producers, stronger carbon border protections under CBAM, and new “green ammonia corridors” with countries in Africa and the Middle East

💬 One quote: “The EU Fertiliser Action Plan must be the turning point where we stop trying to ‘fix’ a broken, fossil-dependent model.” — Lisa Tostado, Center for International Environmental Law

📈 One stat: Around 30% of global fertiliser trade passes through the Strait of Hormuz

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