Shropshire Farming Talk: How will the Carbon Border Adjustment Mechanism impact agricultural businesses?

 This policy aims to curb carbon emissions by imposing a levy on imported goods based on their carbon footprint, aligning with the EU’s Green Deal to meet climate goals.

For agricultural enterprises, CBAM could increase the cost of importing certain products, including fertilisers, feed, and equipment. 

Businesses relying on imports of these commodities might face higher expenses, potentially passing on costs to consumers. 

This could also impact competitiveness, particularly for businesses that do not have the same resources to invest in low-carbon alternatives.

At the same time, CBAM offers an opportunity for UK farmers to invest in greener technologies and practices to stay competitive in the European market. For example, adopting carbon-reducing farming methods or sustainable practices could help mitigate the impact of CBAM and even provide an advantage in markets focused on environmentally friendly products.

The agricultural sector, which already faces pressures from rising energy costs and market uncertainty, must prepare for the wider economic shifts this mechanism will trigger. 

In the long term, those who innovate towards sustainability could find new markets and revenue streams, benefiting from both regulatory incentives and consumer demand for green products.

One practical step for agricultural businesses to navigate the challenges and opportunities posed by CBAM is to complete a carbon audit. Such an audit can be an invaluable tool in identifying areas where emissions can be reduced, thereby aligning with the EU’s stringent carbon standards. 

Through the Defra Future Farm Resilience Fund, farmers in the England can access these audits for free, offering a critical starting point for adapting to new regulatory landscapes. For bespoke advice, contact us at contact@ceresurural.co.uk of via our website Home - Ceres Rural.

by Toby Eve, Farming Consultant at Ceres