Comprehensive support package required to reduce higher fuel and energy costs

ICOS President Edward Carr has today written to Minister Martin Heydon to urge immediate steps by Government to ensure food security in light of the escalating conflict in the Middle East. The co-operative body has called for the immediate suspension of CBAM and a comprehensive support package to reduce higher fuel and energy costs.

“The closure of the Strait of Hormuz is not only a threat to global energy security but equally threatens global food security,” said Mr. Carr.  

“The Middle East region is a key player in the global fertiliser trade accounting for 30% of exports of all major fertilisers. Over one third of urea, one fifth of ammonia and ammoniated phosphate and half of the sulphur produced globally is exported through the Strait of Hormuz. In addition, volatility in global energy prices directly affects the production costs of fertiliser, particularly in Europe.

“We have seen significant pressure on fertiliser availability and cost in recent weeks, with average urea costs increasing by €200 per tonne and other fertilisers by €100-150 per tonne. In recent developments, fertiliser suppliers have been forced to withdraw their prices due to the significant market volatility.”

Edward Carr highlighted a warning from the International Fertiliser Association that “if disruptions to energy and fertiliser trade routes persist, the impacts will be felt most strongly in countries that depend on imported fertiliser”.

“Ireland is exposed as a significant importer of fertiliser and due to our seasonal production system,” Carr stated.  “The introduction of the definite phase of the Carbon Border Adjustment Mechanism (CBAM) from January 2026 is having a huge impact on cost and availability. For example, the cost of CBAM on non-EU CAN is approximately €120 per tonne, which is a prohibitive cost.”

ICOS has consistently warned against the introduction of CBAM for fertiliser.

Earlier this year, EU agriculture ministers discussed the situation with the European Commission and agreed to reduce the Most Favoured Nation (MFN) duties on imported fertilisers into Europe, in an effort, to offset the cost of CBAM. However, it is widely accepted that this measure will have little or no impact. The European Commission also amended the CBAM regulation to allow the temporary suspension of CBAM (under Article 27a). However, this process is before the EU legislative procedure, and unless expediated will take several months before the process is completed.

“Due to the emerging crisis, we now believe it is appropriate for the EU to trigger Article 122 of the Treaty on the Functioning of the EU (TEFU) and to immediately suspend the CBAM tax on fertiliser. This approach will assist with alleviating the impact on cost and availability,” said Mr. Carr.

“Excessive input cost inflation experienced since 2022 remains a significant challenge for the agri-food sector.  Against the backdrop of downward pressure on output prices, further increases in farm level costs are deeply concerning. Consequently, we also call on the Irish Government to bring forward a package of supports, similar to the emergency measures introduced in 2022 to help lessen the impact of higher energy and fuel costs caused by the conflict in the Middle East.”

In conclusion, the ICOS president urged the Government to take immediate steps at EU and National level to address the impact on the Middle East crisis on food security.

“We call on the Government to support the immediate suspension of CBAM on fertiliser and to bring forward a comprehensive support package to reduce the higher fuel and energy costs,” Edward Carr concluded.