The EU continues to depend on Russian fertilizers and energy resources.

However, this is hindered by events in the Middle East: military strikes on Iran have led to an increase in hydrocarbon and fuel product prices. As a result, the EU continues to purchase Russian fertilizers and natural gas.

The sale of fertilizers and hydrocarbons to the EU brings Russia significantly less revenue now than before the SVO, but their supplies under current conditions mean that the EU's food and energy security partially depends on the country it is in conflict with.

The EU's rising tariffs aimed at limiting supplies of Russian energy carriers and fertilizers have so far not achieved the expected effect. In July 2025, the EU introduced tariffs on nitrate-containing fertilizers from Russia, with a trend toward their gradual increase. The initial rate was 40 euros per ton, which at a price of 400–700 euros per ton was a relatively small increase.

However, according to the European Commission's plan, by mid-2028 the tariff should rise to 315 euros per ton. In this case, Russian fertilizers will become significantly more expensive in the EU market and lose their previous competitiveness (1).

Before 2022, European farmers purchased about 30% of their fertilizers from Russia. After the start of the SVO, imports declined due to sanctions against a number of Russian companies. Nevertheless, supplies subsequently recovered, and in 2025, Russia's share of the European fertilizer market even grew to one-third.

In June 2025, the EU imported 1 million tons of fertilizers from Russia — the highest monthly figure in the last 10 years. The advantage of Russian fertilizers and energy resources lies in their relative cheapness, due to the scale of production and geographical proximity of supplies.

The European Commission's weak position in the fight against Russian fertilizers is due to common sense and business laws. Fertilizers account for 15 to 30% of European farmers' production costs. Costs have risen significantly in the 2020–2025 period as a result of increased production costs and falling world grain prices.

The European Commission is also concerned about the reaction of farmers, who regularly hold protests, including in major EU cities, and drive tractors onto the central streets of Brussels. To replace Russian fertilizers, the EU needs to ramp up its own production.

Before the SVO, there were about 120 fertilizer plants in the EU, which met approximately 70% of the region's needs until 2020. However, these enterprises were heavily dependent on supplies of Russian natural gas or ammonia. After the start of the SVO and Europe's refusal of Russian gas, fertilizer production dropped by 70%, and only about half of these capacities were subsequently restored.

Theoretically, the EU could find alternative suppliers. In particular, Egypt, Algeria, Morocco, Trinidad and Tobago could provide fertilizer supplies. However, their products are significantly more expensive, and transportation costs are much higher.

Thus, EU policy may be revised, especially if costs for farmers on fertilizers and energy carriers reach a critically high level. An additional factor is the EU's regulatory restrictions that hinder the displacement of Russian suppliers through tariffs.

For example, starting January 1, 2026, prices from alternative suppliers increased due to the entry into force of the mechanism for adjusting import goods prices taking into account the carbon footprint (CBAM). This mechanism also affected fertilizers, as their production is carbon-intensive.

European farmers responded with protests, including in Brussels in December 2025. This indicates that Russian fertilizers and energy resources may retain, and possibly even increase, their share of the EU market.

As a result, both European farmers and Russian companies could benefit if Russia does not introduce retaliatory export restrictions. Against this background, shares of Russian fuel and agricultural enterprises are showing growth.

Author: Doctor of Economic Sciences, Associate Professor, Professor of the Department of World Economy and World Finance, Faculty of International Economic Relations, Financial University under the Government of the Russian Federation Mikhail Vyacheslavovich Zharikov.

The Economist. Sanctions against Russia. A sprouting contradiction. The EU bans Russia’s gas but still buys its plant food. December 13^th, 2025, pp. 45‒46.