Farmers and agri-food producers should be provided with "appropriate financial support" if they are impacted by price increases arising from the Carbon Border Adjustment Mechanism (CBAM).

That's according to Fianna Fáil MEP Barry Cowen, who has co-tabled an amendment to upcoming EU legislation on the CBAM.

The Midlands North-West MEP has also sought to strengthen the proposed safeguard mechanism allowing the European Commission to temporarily remove products from CBAM where its application "causes severe harm to the EU internal market through serious and unforeseen price impacts".

CBAM, which came into force on January 1, is essentially a tax on imports of carbon-intensive products into the EU, including fertiliser.

The measure requires importers of fertiliser to pay for certificates to import products.

Amendment

The amendment is co-tabled by Cowen alongside European People's Party (EPP) Spanish MEP Carmen Crespo Díaz and Romanian EPP MEP Daniel Buda ahead of the European Parliament's September plenary vote.

It would require the European Commission to continuously monitor CBAM's impact on the internal market.

The amendment provides that where the safeguard is triggered, financial support should be made available to both producers of the product directly affect and businesses which use it as an input.

Also, the amendment provides for the possibility of financing such support from CBAM revenues, with payments "proportionate to the harm suffered".

‘Demanding agricultural standards’

Cowen, who is a member of the European Parliament's Agriculture and International Trade Committees, said that the provision was particularly important in protecting European farmers from potential increases in the cost of fertiliser.

He said: "I've consistently supported the principle behind CBAM.

"But good environmental policy cannot mean simply passing another cost down the chain until it eventually lands at the farm gate.”

The MEP added that fertiliser, which is not produced in Ireland, is one of the “largest input costs” that farmers face.

He said: “If the application of CBAM results in serious and unforeseen price increases, Europe needs to have both the power and the willingness to respond."

Cowen outlined that his amendment had two objectives.

"Firstly, we want the commission continuously monitoring the impact of CBAM and able to temporarily remove a product where serious and unforeseen circumstances cause severe harm to the European market.

"But importantly, our amendment goes further: Where productive sectors are directly hit, we want appropriate financial support to be made available, including potentially using revenues raised through CBAM itself," he explained.

He added that, for farmers, that principle is particularly important.

The MEP said: "If Europe raises revenue from a carbon mechanism which at the same time significantly increases the price of an essential input like fertiliser, there is a strong argument that some of that money should be available to support the producers bearing the cost.

"The objective of CBAM is to prevent carbon leakage and encourage cleaner production.

“It should not be to make European farmers less competitive.”

Cowan said that farmers should not be asked to “absorb additional costs” in pursuit of objectives set at a European level.

He added: “This amendment provides both an emergency brake and, importantly, a financial safety net if those costs become excessive."