EU plans to bolster fertiliser supplies as Middle East war raises food price risks

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EU bolsters fertiliser supplies

Highlights

Draft European Commission plan proposes extra support through the Common Agricultural Policy and strategic fertiliser stockpiling to address supply and cost pressures.
Disruption risk via the Strait of Hormuz and surging gas prices have pushed April 2026 fertiliser prices about 70 per cent above their 2024 average.
Immediate fertiliser relief likely relies on looser state aid rules, risking uneven support across the EU and continued application of emissions trading to fertilisers.

Commission plan targets supply and cost pressures

As first reported by the Financial Times, draft versions of the European Commission's action plan show officials are weighing extra support through the EU's Common Agricultural Policy and examining strategic fertiliser stockpiling over the longer term. The package is set for publication today, although the text could still change before final adoption.

The move comes as fertiliser supply chains remain exposed to disruption through the Strait of Hormuz, a route that previously handled as much as one-third of globally traded fertilisers. With gas making up as much as 80 per cent of the cost of nitrogen-based fertilisers, the surge in energy markets has already lifted April 2026 prices to about 70 per cent above their 2024 average.

The Commission also wants to create lead markets for organic and low-carbon fertilisers and encourage demand for products manufactured in Europe. Among the technical options under review is broader use of digestate, a nutrient-rich byproduct from biogas production whose agricultural use is currently constrained by its high nitrogen content.

Food inflation and uneven support remain risks

Officials are trying to contain rising fertiliser costs before they feed into wider food inflation by the end of the year, reviving pressures similar to those seen after the 2022 energy crisis. That raises the stakes not only for farmers and food producers but also for consumers, government budgets and political leaders across the bloc.

As with earlier energy support schemes, however, much of the immediate burden is likely to fall on member states rather than Brussels. The fastest relief may come from temporarily looser state aid rules already proposed by the Commission, a route that could result in uneven levels of support across the EU.

Farmers seeking a wider retreat from EU climate rules are unlikely to get it under the current plan. The bloc's emissions trading system and carbon border adjustment mechanism are still set to apply to fertilisers.

Our earlier coverage of the EU’s looming spring forecast revisions explained how the Iran war’s energy disruption is pushing officials to mark down growth and lift inflation projections. It also noted that with the Strait of Hormuz closed and oil above $100 a barrel, policymakers face tighter room for maneuver and a higher risk of prolonged, second-round inflation effects.

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