Amid the tense situation surrounding the Iran nuclear deal, the European Commission in Brussels has set the first fixed CO2 price for its new border tariff, creating an additional cost risk for importers, industry, and agriculture. For the first quarter, the reference value is €75.36 per certificate under the Carbon Border Adjustment Mechanism (CBAM). Imports of steel, aluminum, cement, and fertilizers are affected. The fees apply to imports from January 2026 onward, while the necessary certificates do not need to be purchased until 2027. The critical point, however, lies in the timing of this decision, as supply chain disruptions and rising costs are already severely impacting markets due to the Iran nuclear deal. The main consequence is therefore clear: companies must factor in new additional costs, farmers will face further price pressure, and Europe’s dependence on fragile supply chains will persist. (taxation-customs 07.04.26)
CO2 Price Hits Europe at a Time of Maximum Tension
With the newly established value, the EU’s climate instrument is quantified for the first time. While this provides a metric for companies, it also serves as a warning signal. Those who rely on imported intermediate goods must prepare for significantly higher import costs. Especially in an already volatile market environment, this step will therefore not have a stabilizing effect, but rather add to the strain.
The EU aims to create a level playing field for European manufacturers with the border tariff. While this sounds logical on paper, in practice it impacts a market already under pressure. If energy remains expensive and supply chains are unstable, an additional cost factor exacerbates the situation. This is precisely why the CO2 price is being introduced at such an inopportune moment. A climate policy instrument is thus becoming, in the midst of the crisis, yet another driver of price increases for parts of the economy.
Dispute over fertilizers demonstrates the explosive potential of the decision
The situation is particularly critical regarding fertilizers, as agriculture, food security, and industrial policy directly intersect here. France, Italy, and Croatia wanted to suspend the levy on imported fertilizers to relieve the burden on farmers. However, the Commission rejected this proposal. In doing so, Brussels is accepting that a key sector of food production will continue to operate with high costs.
The EU’s justification is that an exemption could further increase Europe’s dependence on imports. While this points to a real risk, it does not solve the immediate problem. If fertilizers become more expensive, the burden on agricultural businesses will increase simultaneously. These costs can later be passed on to consumers. The CO2 price therefore affects not only importers, but indirectly the entire supply chain.
Brussels focuses on long-term goals and immediately intensifies the pressure
The CBAM system has been in its final phase since the beginning of the year. The multi-year transition period with purely reporting obligations expired at the end of 2025. This year, the Commission intends to publish four quarterly prices, with weekly announcements to follow from 2027 onward. This demonstrates how seriously Brussels is now taking the system. For affected industries, however, this means that regulatory uncertainty will very quickly translate into real hardship.
While the Commission plans to consult with industry on April 13 regarding support for European fertilizer production, this demonstrates the need for action but comes too late for many companies. Brussels is immediately increasing import costs, while relief measures and production ramp-up are still under discussion. This sequence further exacerbates the political conflict. The price for the second quarter is due on July 6, and therefore the dispute over the consequences of the system is likely to escalate rapidly.