Fertilizer Industry In Flux: A Changing Regulatory And Policy Environment – Land Law & Agriculture

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 3
  to 5 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.

Calgary lawyer Kristal Allen will appear at the World
Agri-Tech Innovation Summit, taking place in San Francisco from
March 14 – 15. On March 14, Kristal joins the
“Commercialization Spotlight: Building a Biologicals Business
to Scale” panel discussion. Learn more about the conference.

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guide to the subject matter. Specialist advice should be sought
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