Geopolitics of Fertilisers: The Dependence of European Agriculture

Within the European Union, the debate between environmental requirements, agricultural productivity and economic competitiveness continues to crystallise tensions. At the heart of these trade-offs lies the issue of fertilisers, which have become a major geopolitical stake as external dependencies, energy tensions and climate policies increasingly intersect. As the European Union deploys the Carbon Border Adjustment Mechanism (CBAM), a regulatory instrument designed to subject products imported into the EU customs territory to carbon pricing equivalent to that borne by European industrial producers, in order to combat carbon leakage, the structural fragilities of the European agricultural model are becoming more apparent. As European agriculture ministers meet on 7 January 2025, Sébastien Abis, associate researcher at IRIS and Director of Club DEMETER, answers our questions.

Why have fertilisers become a major geopolitical issue, and why is Europe particularly exposed?

Fertilisers are agricultural inputs intended to supply soils and plants with the nutrients essential for crop growth. They compensate for the natural depletion of soils and support agricultural yields. They are, in a way, vitamins. The three main nutrients provided by fertilisers are nitrogen (N), phosphorus (P) and potassium (K), each with distinct and complementary functions. Without fertilisers, agricultural production would not have experienced such growth in the twentieth century. They are strategic inputs for global food security. Their geopolitical dimension becomes more pronounced when we realise that these fertilisers, used everywhere, depend on mineral resources concentrated in a small number of countries. China plays a regulatory role in nitrogen fertilisers as it produces 30% of them and occasionally cuts its exports. Russia, the United States, Qatar, and to a lesser extent Egypt and Saudi Arabia, are the world’s main suppliers of nitrogen fertilisers. Gas is required for their production, which explains this geography. As for phosphate rock, while China is once again the leading producer, Morocco holds the largest reserves and accounts for more than one third of global exports. There are also deposits in the United States, and Saudi Arabia is seeking to develop this sector. With regard to potash, Canada, Russia and Belarus account for two thirds of global production and exports. Very few nations, therefore, all of which monetise this power and can sometimes use it as a major diplomatic lever.

It must be clearly understood that fertiliser trade, through globalised logistics chains, is essential to international balances. If the context hardens and supply instability gains ground, as has been the case in recent years, inevitable vulnerabilities emerge for regions that are highly dependent on imports. This is the case for the European Union (EU), one of the most fertiliser-dependent agricultural regions in the world. More than 60% of fertilisers consumed in the EU are imported, and for potash or phosphorus the dependence is almost total. For a long time, this reality was largely underestimated, as fertilisers were seen as a technical agricultural input rather than a strategic one, often confused with plant protection products. The Covid pandemic, Russia’s large-scale invasion of Ukraine, energy tensions, export restriction measures by certain actors, and the return of transactional geo-economic practices have all brutally revealed this structural European fragility.

What is the link between the Carbon Border Adjustment Mechanism (CBAM), which is meant to protect European industry, and fertilisers, and why does it create a difficulty for agriculture?

CBAM entered into force on 1 January 2026 for cement, aluminium, iron, steel, electricity and fertilisers, before being extended to all sectors by 2035. CBAM is not a surprise. It is part of the European Green Deal launched in 2019 to achieve carbon neutrality in the EU by 2050. It should therefore have been known for several years by the actors concerned, including those in agriculture. Moreover, a forward-looking analysis was conducted in the 2023 edition of Déméter, whose reading today proves enlightening. CBAM follows a theoretically coherent logic: avoiding carbon leakage by applying to imports a carbon price equivalent to that borne by European producers. The problem is that agriculture is both inside and outside the system. On the one hand, fertilisers – key agricultural inputs – are included in CBAM. On the other hand, farms are not covered by the European carbon market (ETS), the cap-and-trade mechanism that imposes a carbon cost on the most emitting industrial and energy sectors. The result is that farmers face a potential increase in input costs without benefiting from a symmetrical compensation mechanism. This situation illustrates a worrying lack of synchronisation: European climate policies designed for an ideal, cooperative world in which EU leadership on decarbonisation would be recognised, but deployed in a competitive, not to say fierce and belligerent geopolitical environment that has been asserting itself since 2020, and in which the EU’s influence is sharply declining, as, unfortunately, are climate commitments.

CBAM exposes European agriculture to carbon pricing over which it has no control, either in terms of timing or precise operating parameters. Estimates by professional organisations indicate a risk of additional costs of around €150 per hectare in certain productions. In a context where margins are already under pressure, this directly undermines the competitiveness of European agriculture, particularly cereal farming, with a possible domino effect on exports. Producers will not be able to purchase fertilisers at such prices for long and therefore risk using less of them. Yet less fertiliser means less protein in grains, lower harvested volumes and thus fewer surpluses available, for example, to export wheat worldwide. Some may say: so what, after all, why preserve a global vision of food security issues? Everyone for themselves. But we should remain vigilant about this game and the mirror effects that await us, or the socio-political instabilities that may develop due to lack of access to basic foodstuffs. We can criticise the interdependence of the global agricultural and food system. But we do not really know what a planet would look like where borders in this field were total. Agricultural and food autarky, geopolitically speaking, is rarely sustainable.

Europe talks a great deal about sovereignty. Are fertilisers a test of credibility?

It is obviously necessary to avoid CBAM, designed to combat carbon leakage, paradoxically resulting in a loss of agricultural production in the EU and increased dependence on external suppliers. It is counterproductive to seek to develop an open strategic autonomy for the EU that could weaken such an essential productive sector. The EU has long reasoned as if supply chains would remain open, fluid and apolitical. That assumption is now obsolete. The Union seeks to protect itself against carbon-related distortions of competition, but it is applying this tool in a profoundly asymmetric geopolitical era, where powers do not share its rules, its timetable or its vision. In the case of fertilisers, the EU is taxing more heavily what it does not control, without having secured a credible alternative. It has decided to tax Russian fertilisers, not without reason, but this supplier accounted for 25% of its nitrogen fertiliser supplies, and it must now turn to the United States, among others, to source them, at a far higher price. In this gas war, the EU is by far the biggest loser.

Furthermore, if these inputs are more expensive and we do not produce them within the EU, who will pay the bill as a result of this spiral of regulatory escalation? Producers, public authorities, consumers? We must also raise the question of developing green fertilisers on European soil, but here again this requires industries, investment in low-carbon technologies and regulatory frameworks that allow such developments. As always in environmental matters, it will be necessary to explain that when something is greener, it is generally much more expensive.

More broadly, beyond the need to avoid generating economic injustices internally, the EU will have to explain CBAM without fuelling an anti-European narrative externally. This was the subject of intense discussions on the margins of COP30 in Brazil last November. This requires rapid clarification of the methods used to calculate imported emissions, between verified real data and default values, because uncertainty itself is today a risk factor.

In short, for the EU, continuing to speak of food sovereignty without directly addressing the issue of fertilisers for its agriculture amounts to confusing strategic vision with political incantation. If decarbonisation results in a loss of agricultural competitiveness and increased dependence on imports, then we are no longer talking about transition, but about productive disarmament. Power is not decreed solely through norms or ideas, but through the capacity to act and the means that lend long-term credibility to action.