UK CBAM fertiliser levy could raise farm costs and food prices by 2027

The UK government is facing pressure to delay or suspend a carbon levy on imported fertilisers set for January 2027 under the Carbon Border Adjustment Mechanism (CBAM). Industry groups warn the charge could add tens of pounds per tonne to fertiliser costs, hitting arable, livestock, and dairy farms across Scotland and the rest of the UK. Higher input costs may lead to reduced crop production and higher food prices, according to farming representatives. The CBAM is modeled on the EU's version and applies to carbon-intensive goods like fertiliser based on their production emissions. Critics argue the timing is poor given existing pressure from high fuel and fertiliser prices tied to Middle East instability. A typical 500-acre cereals farm could face losses of up to £70,000 if the levy proceeds. The Treasury is exploring tariff suspensions on some agricultural goods but has not signaled a delay to the CBAM itself.