Farmers’ union urges Chancellor to halt new fertiliser carbon charge

Saturday 26 September 2026

The Ulster Farmers’ Union (UFU) is urging the Chancellor to pause plans to apply a new carbon charge to imported fertiliser, warning that higher costs could ultimately fall on farmers and make domestic food production more expensive.

The UK Carbon Border Adjustment Mechanism (CBAM) is due to take effect from 1 January 2027 and will put a carbon price on certain imported goods, including fertiliser.

The UFU wants the measure suspended for fertiliser until the Government carries out a full assessment of the likely impact on agricultural costs, farm businesses and domestic food production.

Farmers could carry additional costs

Although fertiliser importers will be directly responsible for CBAM liabilities, the UFU argues that farmers are the end users and could face higher prices as those costs move through the supply chain.

The union says uncertainty also remains over the rates and default emissions values that will be used when the mechanism takes effect.

UFU deputy president Glenn Cuddy said:

“Food security is a strategic national asset and government policy needs to treat it accordingly. At a time of considerable geopolitical uncertainty, the priority should be strengthening our domestic capacity to produce food, not increasing the cost of doing so.

“Fertiliser is not an optional extra for productive agriculture. It is a fundamental input into food production. Farmers have already experienced extraordinary volatility in fertiliser, energy and other input costs in recent years.

“Introducing another cost onto fertiliser at this point risks working directly against the Government’s objectives for food security, productivity and economic growth. Good environmental policy must also be economically sustainable. We should not pursue one policy objective in isolation while inadvertently undermining another.”

Input costs remain well above 2020 levels

The UFU has pointed to figures from DEFRA’s Agricultural Price Index which it says show that, by May 2026, overall agricultural input costs were 36.2% higher than in 2020.

According to the figures cited in the union’s Budget submission, energy and lubricants were 80.6% higher, while fertilisers and soil improvers were 121.5% above 2020 levels.

Mr Cuddy said farmers have limited scope to absorb further increases because many are “price-takers” who cannot simply pass higher production costs on to their customers.

He said:

“Farmers cannot continually absorb additional costs. Most are price-takers and have very limited ability to pass increased production costs further along the supply chain.

“This is also happening against a backdrop of volatile fuel and energy costs. The Government itself recognised those pressures when it reduced the duty on red diesel earlier this year. That support was welcome, but allowing fuel duty to rise again while simultaneously introducing a new cost affecting fertiliser would send completely the wrong signal to farm businesses.”

Call to protect agricultural red diesel rate

Alongside its request for a pause on CBAM for fertiliser, the UFU is calling for the current rebated fuel duty rate for agricultural red diesel to be retained beyond December 2026.

The union says that without further government intervention the duty rate is scheduled to increase in 2027, potentially adding another pressure for agricultural businesses.

Mr Cuddy said:

“Our message to the Chancellor is straightforward. This is not the time to make food production more expensive. There is a wider strategic question here. Recent years have demonstrated how quickly conflict, energy disruption and interruptions to international supply chains can affect the availability and cost of essential agricultural inputs.

“A country that values its food security must value the businesses and inputs required to deliver it. We want to see the Government pause the application of CBAM to fertiliser and undertake a proper assessment of what it will mean for fertiliser prices, farm businesses and ultimately domestic food production.

“If Government nevertheless intends to proceed, farmers and the fertiliser industry need clarity well in advance on the rates, emissions values and likely costs involved.”

Wider Budget demands for farming

The fertiliser issue forms part of the UFU’s wider “A Budget to Back Farming” submission ahead of the Autumn Budget.

Its proposals include restoring 100% Agricultural Property Relief and Business Property Relief, increasing Northern Ireland’s agricultural funding baseline, retaining the reduced red diesel duty rate, changes to capital allowances and what the union describes as a proportionate approach to future labour costs.

Mr Cuddy added:

“The Autumn Budget should be about creating confidence and encouraging investment. Our farmers are ready to invest, improve productivity and play their part in strengthening the UK’s food security. Government must ensure that its tax policy helps rather than hinders them in doing so.”

The Chancellor’s Autumn Budget will therefore be closely watched by Northern Ireland’s farming sector, with the UFU seeking both an immediate pause on applying CBAM to fertiliser and longer-term certainty over the costs farmers will face from 2027.