It comes as the Commission considers introducing a suspension clause, unveiled last December, in the Carbon Border Adjustment Mechanism (CBAM).

The Article 27a tool would give Brussels the power to remove certain goods from the scheme if their inclusion caused “severe harm” to the EU market.

In a letter to top Commission officials, the Hydrogen Council, Hydrogen Europe, Renewable Hydrogen Coalition, and others said the tool “undermines market confidence” and risks jeopardising investment in decarbonisation.

CBAM, which covers hydrogen, electricity, fertilisers, aluminium, iron and steel, and cement, places a carbon price on goods imported into the EU. It was hoped to encourage non-EU countries to decarbonise and place domestic sectors on a level playing field.

However, since it came into force, several EU member states have been lobbying Brussels to remove fertilisers from the scheme, warning it could drive up prices for farmers.

The hydrogen groups say the Article 27a suspension tool lacks “time-bound conditions” that define when and how it could be used.

They argue that clean ammonia and fertiliser producers rely on CBAM being “clear and stable” to make long-term investment decisions.

“The proposed emergency brake has had an immediate tangible and materially disruptive effect on the fertiliser market,” the letter states. “Buyers have delayed contract negotiations, sellers hesitated to price CBAM-related costs, and forward markets have effectively been stalled.”

These concerns mirror those put forward by other industry groups like Fertilizers Europe.

Yara, which is mulling two major clean hydrogen-based ammonia deals with Air Products, warned suspending CBAM would send a “damaging message.”

While Air Products, which will rely on Yara to take a final investment decision on a major US project, brushed off concerns, investors grilled its CEO on the potential suspension during a recent earnings call.

The debate lands at a critical point for European industrial firms, which for years have faced rising green levies at home and warned that this has opened the door to cheap, high-emissions imports.