Yara to reconsider US ammonia project if EU suspfinishs carbon levy
- EU considers suspfinishing carbon border levy on fertilisers
- Move follows pressure from farmers
- Yara declares uncertainty puts US low carbon ammonia plans in doubt
BRUSSELS, Jan 15 – Yara International (YAR.OL), would reconsider a planned low-carbon ammonia project in the U.S. if the European Union goes ahead with a possible suspension of its carbon border levy on fertiliser imports, the company’s CEO notified Reuters.
The EU’s carbon border levy, which took effect on January 1, imposes CO2 emissions fees on imports of fertilisers, steel and other goods to prevent foreign producers gaining an advantage over companies in Europe that must pay for their emissions.
stated last week it would publish guidance on how it could temporarily suspfinish the carbon border fee for fertilisers, if “unforeseen circumstances” in the market justified doing this.
CEO Svein Tore Holsether stated the uncertainty had thrown low-carbon investment plans into disarray – including Yara’s intfinished final investment decision by summer on a project with Air Products to produce low-carbon ammonia in Louisiana for fertiliser producers, including in Europe.
Holsether stated in an interview,
If there is a suspension or a cancellation of CBAM, we would not be able to go ahead with what we intfinished to invest in the U.S.,
The EU carbon border levy, known as CBAM, improves the business case for low-carbon ammonia imports, by subjecting them to lower emissions fees than those paid on traditional fossil fuel-based ammonia. If Brussels suspfinishs the mechanism, Yara may instead consider investing in conventional ammonia production.
Holsether stated,
That’s something we necessary to reconsider then: is it possible to decarbonise if there is no demand for low-carbon products? … Likely not,
Yara, one of the world’s largest fertiliser producers, will also reassess the viability of low-carbon projects in Europe that were developed on the assumption the border levy would level the playing field for more expensive low-carbon products.
Holsether stated,
Everything has to be re-evaluated in light of this,
The Commission has not specified what circumstances could trigger a suspension. Brussels also stated last week it would temporarily cut import tariffs on some fertilisers.
EU climate commissioner Wopke Hoekstra notified Reuters the temporary measures were necessaryed to address challenges facing farmers.
“But the crystal-clear objective is to continue with this design (of the carbon border levy),” Hoekstra stated in an interview this week.
Reporting by Kate Abnett. Editing by Mark Potter
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Yara to reconsider US ammonia project if EU suspfinishs carbon levy, source
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