Will New Environmental Tax on Fertilizers Push Food Prices to New Heights?

The Carbon Border Adjustment Mechanism Explained The Carbon Border Adjustment Mechanism (CBAM) aims to charge sectors at risk of carbon leakage—those that might relocate production to countries with looser emission regulations—based on what they would pay if the goods were produced in the UK. This tax will apply to carbon-intensive imports like cement, fertiliser, iron, and steel. The government argues that this move will ensure a genuine reduction in carbon emissions globally, rather than merely shifting the problem to other countries. Farmers Voice Their Concerns James Alston, a third-generation wheat farmer from Norfolk, has been vocal about his fears regarding the new tax. “Most farms and agricultural businesses at the moment are either making no money or they're losing money,” he stated. With rising costs from Brexit, extreme weather events, and high interest rates already straining their operations, farmers are not in a position to absorb additional expenses. Alston worries that this will lead to a continued decline in UK food production, a situation that could have dire consequences for food supply and prices. The Economic Ripple Effect Lord John Fuller, a Conservative peer and chairman of Brineflow, a fertiliser supplier, echoed these sentiments. He believes that the new levy will merely act as an extra tax on farmers, with the inevitable result being increased prices for staple goods such as bread and beer. “All it will do is cost more and do nothing to reduce carbon in other parts of the world,” he remarked. The potential for increased consumer prices raises questions about the balance between environmental responsibility and economic viability for both producers and consumers. Support for the Tax Not everyone is against the new tax, however. Catherine Rowett, a former Green Party Member of the European Parliament, supports CBAM as a necessary step towards equitable climate action. “It's really important that when we're taking climate action and we're going for our proper targets for net zero, the rest of the world has to do it too,” she stated. Rowett believes that while food prices may rise, measures should be implemented to ensure farmers can still make a profit, thus allowing consumers to access quality food.