EU on Alert for Global Fertilizer Crisis, Emergency Reserves to be Prepared

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JAKARTA - The European Union is preparing for a potential global fertilizer crisis triggered by rising geopolitical tensions in the Middle East. The agriculture ministers of the European Union member countries held a special meeting in Brussels to discuss emergency measures to maintain regional food security amid the threat of disruption of the world's fertilizer supply chain.

Concerns have emerged after conflicts involving the United States (US), Israel, and Iran have increased the risk of shipping disruptions in the Strait of Hormuz, one of the world's most important energy and fertilizer trade routes. The route has been a track for about a third of global fertilizer trade by sea.

Anticipating wider impacts, the European Commission is preparing a new "Fertilizer Action Plan" designed to protect farmers from a surge in production costs while maintaining food supply stability in the region.

The plan includes the establishment of strategic fertilizer reserves, emergency financial assistance for farmers, diversification of import sources, to strengthening domestic fertilizer production. The European Union is also trying to reduce dependence on traditional suppliers such as Russia and Belarus by opening import access from other countries.

The biggest threat is actually not from direct supplies from the Middle East, but rather the chain effect it has on global energy prices. Europe's fertilizer industry is highly dependent on natural gas as the main raw material for the production of ammonia and nitrogen fertilizers. When gas prices rise due to geopolitical turmoil, the cost of producing fertilizers automatically jumps.

Data shows that the European Union still relies on large imports. Throughout 2024, the region imported about two million tons of ammonia, 5.8 million tons of urea, and 6.7 million tons of nitrogen fertilizers and derivatives.

Although supplies from the Middle East only account for a small portion of Europe's fertilizer imports, disruptions in the Strait of Hormuz have triggered significant increases in logistics and energy costs. As a result, nitrogen fertilizer prices in Europe are now reported to be around 70 percent higher than the average for 2024.

This situation reminds Europe of the energy crisis after Russia's invasion of Ukraine in 2022. At that time, the surge in gas prices forced a number of fertilizer plants to stop or reduce production because operating costs were no longer economical.

To prevent a greater impact on the agricultural sector, the European Commission has prepared various assistance instruments through the EU's agricultural budget. Support includes liquidity assistance, flexible payments in the Common Agricultural Policy (CAP) scheme, to incentives for more efficient fertilizer use.

In addition, the European Union has also begun to accelerate the use of bio-based fertilizers and agricultural technologies that are more economical in the use of synthetic fertilizers.

As part of its supply diversification strategy, the European Union has suspended import tariffs on a number of nitrogen fertilizer products, including ammonia and urea, from countries outside Russia and Belarus. The policy is expected to save import costs of around 60 million euros.

However, the impact of the crisis is not expected to be felt evenly. Ireland is one of the most vulnerable countries because almost all of its fertilizer needs depend on imports. In 2025, the country imported about 1.7 million tons of fertilizer to support its livestock and agricultural sectors.

In contrast, some countries have been better prepared for emergency situations. Finland has for years maintained strategic reserves of fertilizers, fuel, and grains. Sweden has also begun building stocks of fertilizers and seeds as part of its national resilience strategy.

On the other hand, the fertilizer crisis has also created differences in interests within the EU. France and Italy are pushing for the relaxation of the Carbon Border Adjustment Mechanism (CBAM) rules so that import costs do not get more expensive. Meanwhile, Germany and Poland are more focused on protecting the domestic fertilizer industry so that it remains competitive.

Although they have not predicted a spike in food prices in the near future, EU officials admit that the risk could emerge in the coming months. The impact of rising fertilizer prices usually takes time before affecting agricultural production and food prices at the consumer level.

Therefore, the European Union is now racing against time to strengthen the resilience of fertilizer supplies before geopolitical turmoil develops into a broader food crisis. If global supply chain disruptions continue, the impact is expected to be felt not only in Europe, but also in developing countries that are much more dependent on imported fertilizers and energy.