EU Suspends Fertilizer Tariffs Amid Hormuz Disruption

The Council of the European Union suspended customs duties on key nitrogen-based fertilizers, including urea and ammonia, for one year after the near-total closure of the Strait of Hormuz disrupted approximately one-third of global fertilizer trade. The measure lifts tariffs ranging from 5.5% to 6.5% and is estimated to save importers roughly €60 million, but explicitly excludes imports from Russia and Belarus. To protect domestic producers, the waiver is capped at a quota based on 2024 most-favored-nation import volumes plus 20% of volumes previously sourced from Russia and Belarus.

The suspension responds to supply shocks caused by the US-Israel conflict with Iran, which has effectively closed the Strait of Hormuz. While the European Commission notes the EU's direct dependence on Middle Eastern nitrogen fertilizers is low — roughly 3% for ammonia and 1-2% for nitrogen products — the broader disruption has spiked global gas prices, raising domestic production costs. The UN Food and Agriculture Organization warned the shipping bottleneck is shifting into a systemic global agri-food crisis, with reduced planting reported in Australia and falling rice supplies across Asia.

The duty suspension aligns with the Fertiliser Action Plan adopted by the European Commission on May 19. EU agriculture ministers convened in Brussels on May 27 to address the crisis, but member states remain divided: Ireland faces acute vulnerability due to import reliance, while Poland and Germany oppose reducing import levies to shield their domestic fertilizer industries. Officials cautioned that while an immediate food price shock is unlikely, higher input costs could push food prices upward within six months.