CBAM and Fertilisers: SA Agricultural Input Exporters and the Carbon Gate

Fertilisers are covered by CBAM due to their high nitrogen content and energy-intensive production. South African fertiliser exporters and importers of EU-bound agricultural inputs face new compliance requirements.

Published April 2026·Last updated April 2026·carbonborderadjustment.co.za

CBAM and Fertilisers: SA Agricultural Input Exporters and the Carbon Gate

Nitrogen fertilisers are among the most carbon-intensive products in global trade, and their inclusion in CBAM reflects the EU's determination to address carbon leakage across the full range of energy-intensive industries.

Why Fertilisers Are in CBAM

The production of nitrogen fertilisers depends on ammonia, which is manufactured using the Haber-Bosch process — a reaction between nitrogen (from air) and hydrogen (from natural gas or coal) at high temperature and pressure:

N₂ + 3H₂ → 2NH₃

This process accounts for approximately 1–2% of global energy consumption and 1% of global CO₂ emissions. In South Africa, where natural gas is scarce and coal is the primary energy source, the embedded carbon intensity of ammonia production is particularly high.

The EU default embedded carbon factor for fertilisers is 2.85 tCO₂/tonne.

CBAM-Covered Fertiliser Products

CBAM covers the following fertiliser categories under Annex I:

| Product | CN Code | Notes | |---------|---------|-------| | Urea | 3102.10 | Most widely used nitrogen fertiliser | | Ammonium nitrate | 3102.30 | High-nitrogen, used in blended fertilisers | | Ammonium sulphate | 3102.21 | Byproduct of coke production | | Mixed nitrogen fertilisers | 3102.40, 3102.50 | Various blends | | Nitric acid | 2808.00 | Precursor to ammonium nitrate |

South Africa's Fertiliser Industry

South Africa's fertiliser industry is anchored by:

▸Sasol — produces ammonia and ammonium nitrate at Secunda and Sasolburg using coal-to-chemicals technology
▸AECI — produces ammonium nitrate for mining and agricultural applications
▸Omnia Holdings — produces nitrogen fertilisers and agricultural chemicals

Sasol's coal-based ammonia production has a particularly high embedded carbon intensity compared to natural gas-based production, making SA fertilisers among the most CBAM-exposed in global trade.

The Green Hydrogen Opportunity

The most transformative pathway for reducing fertiliser CBAM liability is the transition to green ammonia — ammonia produced using green hydrogen (from renewable electricity electrolysis) instead of fossil fuel-derived hydrogen.

South Africa's green hydrogen strategy, anchored by the Hydrogen Society Roadmap, positions the country as a potential major green ammonia exporter. Green ammonia has near-zero embedded carbon, making it CBAM-competitive with European production.

Complete your CBAM compliance registration at the Digital Product Passport Registry.

Frequently Asked Questions

Why are fertilisers covered by CBAM?

Nitrogen fertilisers (urea, ammonium nitrate) are produced from ammonia, which is manufactured using the Haber-Bosch process — an extremely energy-intensive process that uses natural gas or coal as both feedstock and energy source. The embedded carbon intensity of nitrogen fertilisers is approximately 2.85 tCO₂/tonne.

Which fertiliser products are covered by CBAM?

CBAM covers urea (CN 3102.10), ammonium nitrate (CN 3102.30), mixed nitrogen fertilisers (CN 3102.40, 3102.50), and other nitrogen-based fertilisers listed in CBAM Annex I.

Does CBAM affect SA farmers who import fertilisers?

CBAM applies to the EU importer, not the SA exporter directly. However, the cost of CBAM certificates will be passed through the supply chain, increasing the price of fertilisers imported into the EU from South Africa. This affects SA fertiliser producers' competitiveness in EU markets.

What is the connection between CBAM and green hydrogen for fertilisers?

Green hydrogen (produced from renewable electricity via electrolysis) can replace fossil fuel-derived hydrogen in the Haber-Bosch process, producing 'green ammonia' and ultimately 'green fertilisers' with near-zero embedded carbon. This is a key opportunity for South Africa's green hydrogen strategy.

How does the SA carbon tax affect fertiliser CBAM liability?

SA fertiliser producers paying the domestic carbon tax can claim a deduction against their CBAM liability. However, the SA carbon tax rate is significantly below the EU ETS price, so most producers will still face a net CBAM cost.

Gate 3 — Complete Registration

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Complete all three compliance gates — Gate 1 KYC identity verification, Gate 2 CBAM financial authorisation, and Gate 3 Digital Product Passport registration — in one place at the DPP Registry.

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