Yara International ASA is threatening to abandon a planned $300 million green ammonia facility in the United States if fertilizers are excluded from the European Union’s carbon border adjustment mechanism. The company argues that excluding agricultural inputs would undermine incentives for low-carbon production.
- Yara International plans a $300 million green ammonia plant in the U.S. producing 150,000 metric tons of low-carbon fertilizer annually
- Exclusion of fertilizers from the EU's CBAM could cause Yara to cancel the U.S. project
- Fertilizers contribute approximately 1.8% of global CO2 emissions and account for over 10% of agricultural greenhouse gases
- Without CBAM coverage, Yara estimates up to 40% of its green output could be displaced by higher-emission imports
- EU Commission consultation on fertilizer inclusion is scheduled for April 2026
- Decision impacts investment trends in sustainable agriculture infrastructure and cross-border trade dynamics
Yara International ASA has issued a stark warning: it may halt construction of a $300 million green ammonia plant in the U.S. if fertilizers are not included in the EU’s carbon border adjustment mechanism (CBAM). The project, intended to produce 150,000 metric tons annually of low-emission fertilizer, relies on the economic viability provided by future access to the EU market under CBAM. Without inclusion, Yara says it cannot justify the capital outlay in a competitive landscape where non-critical producers could undercut prices through cheaper, high-emission imports. The EU’s CBAM currently covers iron, steel, cement, aluminum, electricity, and hydrogen. Fertilizer manufacturers have been lobbying for inclusion, citing their significant emissions footprint—accounting for roughly 1.8% of global CO2 emissions annually. Excluding them would create a regulatory gap that undermines efforts to decarbonize agriculture, a sector responsible for over 10% of anthropogenic greenhouse gas emissions. Yara estimates that without CBAM coverage, up to 40% of its projected green fertilizer output could be displaced by lower-cost, high-carbon alternatives from outside the bloc. Market observers note that the outcome could reshape transatlantic agribusiness investment flows. If Yara proceeds with the U.S. project, it would represent one of the largest private investments in climate-aligned agriculture infrastructure since 2022. Conversely, cancellation could signal broader investor caution toward green chemical projects dependent on carbon pricing frameworks. The decision is expected by mid-2026, following an EU Commission consultation due in April 2026. Affected stakeholders include U.S. states seeking green industrial growth, European farmers reliant on stable supply chains, and global fertilizer exporters preparing for compliance adjustments. The final ruling will impact both environmental outcomes and trade policy alignment across two major agricultural economies.