EU plans more carbon-free emissions permits for fertilizer industry

The European Commission is making continuous efforts to reduce the carbon footprint across the globe.

As Europe grapples with surging fertilizer costs triggered by the US-Iran war, a draft proposal showed the EU commission is considering giving more free CO2 emissions permits to fertilizer companies if they ramp up local, low-carbon production.

The jump in gas and fertilizer prices following the effective closure of the Strait of Hormuz, a key shipping route, has disrupted businesses worldwide.

A draft EU fertilizer plan is due to be published on Tuesday and sets out how Brussels will attempt to support the sector and cushion farmers from soaring costs.

Among the options the Commission is exploring would be to give the fertilizer industry more free CO2 emissions permits to reduce ‌companies' bills for complying with the EU carbon market, according to a draft of the EU plan.

The draft said the extra CO2 permits would be "conditional on an increased production of bio-based (organic), circular, or low-carbon fertilizers, securing availability of home-grown fertilizers in Europe."

The plan would be part of an upcoming overhaul of the EU carbon market, which the Commission plans to propose in July.

Other parts of the fertilizer plan that are yet to be finalized include potentially giving extra subsidies for the hardest-hit farmers to cope with higher fertilizer costs.