C 184/110
EN
Official Journal of the European Union
25.5.2023
2.
Introduction and background 2.1.
Fertilisers are made of three essential nutrients for plant growth: nitrogen (N), phosphorus (P) and potassium (K).
2.2.
Fertilisers are a key input in the majority of current agricultural production.
Their availability and affordability play an essential role in food security.
Since the beginning of 2021, there has been a global mineral fertiliser crisis, initially due to a surge in demand in the wake of the post-COVID recovery, and further aggravated since Russia's invasion of Ukraine by supply limitations from Russia, Belarus and Ukraine, three major global fertiliser suppliers.
2.3.
The fertiliser crisis has been particularly acute in Europe since (i) the EU is a large net importer of fertilisers; (ii) the EU fertiliser market for nitrogen and phosphorus is protected by import duties pushing domestic prices above global prices; (iii) EU fertiliser imports from Russia, Belarus and Ukraine, which previously accounted for 43 % of EU imports, have significantly dropped since March 2022, in spite of the EU's official no-ban policy on food and fertiliser imports from Russia.
2.4.
Domestic fertiliser prices have risen to record levels (threefold for mineral nitrogen in November 2022 vs.
January 2021).
Together with scarce supply and delayed purchases, this resulted in a significant decrease in EU fertiliser use for the 2022 harvest (1), and a possible shortage in several Member States in the spring 2023 affecting the 2023 harvest.
2.5.
This is happening in the context of the European Green Deal and the Farm to Fork Strategy (2), as published by the European Commission in May 2020, including the proposed EU-wide targets to ‘reduce nutrient losses by at least 50 %, while ensuring that there is no deterioration in soil fertility’, reducing ‘the use of fertilisers by at least 20 % by 2030’.
3.
General comments 3.1.
The EESC stresses that easily available and affordable fertilisers are essential for agricultural production and food security in Europe and globally.
Fertiliser shortages and excessive fertiliser prices lead to reduced crop yields, jeopardise food production and participate in food price inflation at the expense of European citizens and mankind.
3.2.
The current crisis on the fertiliser markets is a particular threat in low-income countries, which are acutely affected by food insecurity.
It is also a threat in Europe where vulnerable groups are already facing food affordability challenges, and the fertiliser crisis can lead to reduced harvests, thereby impacting global food security as the EU is a major cereal producer and exporter.
3.3.
The EESC believes that the global scarcity of fertilisers is not only caused by the high price of natural gas, but also by a supply-demand imbalance and logistical limitations.
In the EU, this is further aggravated by the continent's high level of dependence on mineral fertiliser imports, EU import duties and the war in Ukraine.
Emergency domestic actions 3.4.
In spite of the high fertiliser prices, the cost competitiveness of several EU manufacturers of nitrogen fertilisers appears to have been affected by the extremely high price of natural gas in Europe, which has reached seven times the US level vs. three times in 2021.
Besides prioritised access to natural gas in the event of gas rationing, specific support to the EU nitrogen industry may be useful on a case-by-case basis, with the objective of maximising the use of existing production capacities, as enabled by the amended EU Temporary Crisis Framework for State Aid.
In this respect, economic and social conditionality is required to avoid windfall effects, as some fertiliser manufacturers saw their profits boosted in the wake of the fertiliser crisis.
(1) (2)
According to the European Commission, ‘a combination of drought and high fertiliser prices resulting in lower application rates of P and K in particular, (...) contributed to lower yields’ and the 8 % drop in the EU 2022 cereal harvest vs 2021.
Source: Short-term outlook for agricultural markets, European Commission, 5.10.2022.
COM(2020) 381 final, 20.5.2020.