The Spanish and European agricultural sector is experiencing one of the most challenging periods in recent years. Fertilizer prices have skyrocketed by up to 72% compared to 2024 due to the blockade of the Strait of Hormuz and the crisis in the Middle East, prompting Brussels and Madrid to mobilize emergency funds. However, the removal of a protective clause from the European carbon tax threatens to further worsen the situation for farmers.
While the European Commission and the EU Council have approved a €540 million package from the CAP's agricultural reserve, the Spanish government has already launched a national aid program of €665 million. Both lines of support are complementary and aim to alleviate the impact on farms , but the sector is calling for structural measures that go beyond one-off subsidies.
European and national aid to address rising costs
On July 17, the European Commission confirmed the distribution of €540 million from the agricultural crisis reserve. Spain is the fourth largest beneficiary, receiving €50.174.300 , behind only France, Poland, and Germany. Member States have until February 28, 2027, to distribute these funds to their farmers and can supplement them with up to 200% additional national funding, which would raise the total potential of the package to €1.500 billion across the EU.
Meanwhile, the Ministry of Agriculture, Fisheries and Food has already published the first list of beneficiaries of the direct state aid, endowed with 665 million euros. A total of 424.593 farmers appear on this list and will be able to receive up to 607 million euros, calculated at a rate of 38,33 euros per hectare for dryland and 92,50 euros per hectare for irrigated land, with a limit of 300 hectares per beneficiary. However, to receive the money, it is essential to expressly accept the aid through the FEGA (Spanish Agricultural Guarantee Fund) website before July 27, 2026. Acceptance implies a commitment to having purchased fertilizers after March 1, 2026, and to keep the invoices for ten years.
The CBAM: a tax that makes fertilizers even more expensive
While aid measures are attempting to mitigate the crisis, the Carbon Border Adjustment Mechanism ( CBAM on fertilizers ) has become a new battleground. The European Parliament's Environment Committee has eliminated Article 27a , the only provision that allowed for the temporary suspension of this tax on imported fertilizers in crisis situations. Organizations such as ASAJA and Cooperativas Agro-alimentarias de España (Spanish Agri-food Cooperatives) denounce this decision, arguing that it leaves farmers completely vulnerable just as prices are skyrocketing.
The CBAM levies a charge on the carbon emitted in the manufacture of imported fertilizers, and this surcharge is passed directly on to farmers. According to COPA-COGECA, the cost to European agriculture could reach €820 million in 2026 and climb to €3.400 billion annually by 2034 if it is not revised. The Minister of Agriculture, Luis Planas, has already conveyed to the EU Council his demand to remove fertilizers from the Emissions Trading System (ETS), which would eliminate the CBAM altogether.
The ENVI committee's vote is not final. The European Parliament will vote in September on the possibility of reinstating the safeguard . Both ASAJA and Cooperativas Agro-alimentarias have called on MEPs to seize this opportunity and reinstate a temporary suspension mechanism limited to crisis situations, compatible with decarbonization objectives.
Additional measures and deadlines for farmers
In addition to direct aid, the EU has introduced changes to the CAP to improve liquidity in the sector. A new rural development mechanism has been created, co-financed up to 65% by the EAFRD, which can cover up to 50% of the additional cost of fertilizers. This percentage rises to 80% for those committed to reducing fertilizer use through the application of biofertilizers to combat soil degradation . The advance payment of direct payments for the 2026 campaign has also been brought forward from 70% to 75%, with the possibility of receiving payment before October 16th.
For Spanish farmers, the practical solution already in place is the FEGA national aid program. The steps are clear: check if the farm is listed, accept the aid electronically before July 27 , keep invoices for fertilizer purchases made after March 1, 2026, for a minimum of ten years, and have the farm logbook available should the Administration require it. The deadline for the distribution of European funds, however, extends until February 28, 2027, and Spain can add up to 200% of its national funds to its allocation.
The fertilizer crisis continues unabated, but at least two funding avenues exist that can provide relief to farms while the political standoff over the CBAM (Combined Carbon and Ammonia Agreement) is resolved. The combination of €665 million in national funding and €50,17 million in European funding offers some respite for a sector that, since March, has been paying up to 72% more for nitrogen fertilizers than last year. However, the agricultural sector needs structural solutions to prevent the cost of decarbonization from always falling on the same shoulders.
