By Kate Abnett
BRUSSELS, May 18 (Reuters) – The European Commission is considering giving more free CO2 emissions permits to fertiliser companies if they ramp up local, low-carbon production, a draft proposal showed, as Europe grapples with surging fertiliser costs triggered by the Iran war.
The jump in gas and fertiliser prices following the effective closure of the Strait of Hormuz, a key shipping route, has disrupted businesses worldwide.
A draft EU fertiliser plan seen by Reuters and due to be published on Tuesday sets out how Brussels will attempt to support the sector and cushion farmers from soaring costs.
A Commission spokesperson declined to comment on the draft.
Among the options the Commission is exploring would be to give the fertiliser 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 fertilisers securing availability of home-grown fertilisers 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 fertiliser plan, which is still being drafted and could change before it is published, include potentially giving extra subsidies for the hardest-hit farmers to cope with higher fertiliser costs.
(Reporting by Kate Abnett; Editing by Hugh Lawson)
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