Fertilizer industry in flux: A changing regulatory and policy environment

Back in 2020, the Canadian Food Inspection Agency (CFIA) made substantial amendments to the Fertilizers Regulations as part of its regulatory modernization initiative.

These amendments sought to strengthen regulatory controls for product safety, environmental sustainability and consumer protection, while reducing regulatory red tape. They included the following changes (among others) to the regulation of fertilizer products in Canada:

  • extended the period applicable to product registration from three to five years
  • removed an exemption for specialty fertilizers
  • removed an exemption for fertilizers imported for personal use
  • updated the definition of “supplement” to include materials that act directly or indirectly to improve soil condition or aid plant growth or crop yield, requiring supplements such as polymers, signalling compounds, nanomaterials and DNA aptamers to be registered
  • introduced a requirement for all new product registrations and renewals of existing registrations to be submitted pursuant to the new regulations

Although the amendments came into force on October 26, 2020, a three-year transitional period was applied to aid industry in achieving compliance. During this period, regulated parties had the option of complying with the new regulations or the former regulations in their manufacture, sale, import or export of fertilizers and supplements subject to the Fertilizers Act. The goal was to allow existing product stocks to be exhausted over the three-year period, thereby lowering the cost associated with complying with the updated regulatory requirements and giving regulated parties time to transition their products to the new regime.

Now, the deadline to comply with the amended Fertilizers Regulations is just under one year away. After October 26, 2023, products packaged in accordance with the former regulations must be off the market and registrations granted under the former regulations will be cancelled. With this in mind, it is critical for your fertilizer business to be prepared for the end of the transitional period and full compliance by the fall of 2023.

To aid in preparation, the CFIA held multiple webinars to review and outline the regulatory changes effected by the amended Fertilizers Regulations and provide guidance to the industry and other stakeholders. In addition, our Agriculture & Food team would be pleased to advise you on any questions you may have regarding the transition to the new regulatory regime and registration requirements applicable to fertilizer products.

Emissions reduction

In December 2020, the Government of Canada introduced its updated climate plan “A Healthy Environment and a Health Economy,” targeting the reduction of greenhouse gas (GHG) emissions and the enhancement of carbon sequestration activities.

This plan was inclusive of several measures impacting the agriculture and food industry, including the aggressive goal of reducing GHG emissions arising from fertilizer application by 30% below 2020 levels by 2030. As described in the plan, this emissions reduction target applies to both direct and indirect emissions from the application of fertilizer. Although the plan does not address emissions associated with the manufacturing of fertilizers, it does call attention to the further potential for emissions reductions as the result of the use of new, innovative fertilizer products.

Response to this plan was swift and varied, and gathered steam throughout 2022. Many members of the agriculture and food industry, including growers and fertilizer manufacturers, argued that Canadian growers are already among the most sustainable growers in the world. They warned that the lowering of fertilizer emissions to target levels was unlikely to be achieved without compromising food production. They also noted that concerns regarding food security have become more acute in the face of continued population growth and regional famine, the logistical and labour challenges presented by the COVID-19 pandemic, and commodity market and transportation disruption resulting from global unrest and the Russian invasion of Ukraine.

Other stakeholders, however, argued that the plan and its targets are essential to reduce GHG emissions and battle climate change. According to data cited by the Government of Canada, agriculture was responsible for approximately 10% of Canada’s GHG emissions in 2019, or 73 Mt CO2, and emissions from synthetic fertilizers are estimated to have accounted for approximately 12.75 Mt of that amount. In addition, that same data indicates that fertilizer use in Canada increased by 71% between  2005 and 2019. As the data cited by the Government of Canada appears to illustrate that fertilizers are responsible for a growing share of overall agricultural emissions, environmental groups and other stakeholders view a reduction in fertilizer use as a crucial part of reducing agricultural emissions.

In March 2021, Agriculture and Agri-Food Canada launched a phased consultation with industry, Indigenous communities, environmental organizations and other stakeholders to gather information and feedback regarding the impact of its stated target and develop a plan to achieve it. During the first phase of consultations, a number of key points were discussed, including:

  • the use of the 4R Nutrient Stewardship approach developed by Fertilizer Canada, a collection of best management practices to promote the sustainable use of fertilizer and achieve large-scale emissions reductions
  • possibilities respecting the replacement of synthetic fertilizer with non-synthetic alternatives such as manure or compost
  • opportunities for the use of drainage design and conservation tillage
  • the impact of the use of maximum (rather than minimum) guarantees for nitrogen content and enhanced efficiency technologies in synthetic fertilizers
  • the identification of additional methods by which the reduction of emissions can be supported

The second phase of consultations concluded at the end of August. Following the consultation period, an industry-led report was released suggesting that the Government of Canada’s goal of reducing fertilizer emissions by 30% by 2030 was not achievable. The report argued the plan was both economically non- viable and presented risks to food security and food production that must be carefully considered, adding that an emissions reduction of approximately 15% was more realistic.

However, it is worth noting that the Government of Canada has stated that emission reductions efforts are intended to be focused on improving nitrogen management, encouraging innovation and optimizing fertilizer use rather than a mandatory reduction in the use of fertilizers. In other words, at this time, the government has not proposed a fertilizer ban, regulations to reduce fertilizer emissions or even mandatory emissions reduction practices. What has been proposed as part of the updated climate plan is a voluntary emissions reduction target, supported by a range of best practices and technologies. Whether or not this plan is good policy or will strike an appropriate balance between reducing GHG emissions and maintaining a secure food supply and expanding agricultural exports is a matter of continued debate.

At the time of this writing, a report on the results of the second phase of consultations is expected before the end of 2022. Watch this space for updates regarding the outcome of these consultations and the Government of Canada’s plan to address fertilizer emissions.

This article appears in our 2022 Agriculture & Food Year in Review. Download the free ebook.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.