UK Food And Drinks Market Threatened By Shortage Of CO2 Supply

UK Food And Drinks Market Threatened By Shortage Of CO2 Supply - Carbon Herald
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The UK’s food and drinks industry is threatened once again by a shortage of the CO2 gas. Britain’s beverages industry on Thursday said the government needs contingency plans to ensure supplies of carbon dioxide after a major producer halted its operations, potentially adding to supply chain problems.

CF Fertilisers UK (CFF UK) announced on Wednesday it halts temporarily ammonia production at its Billingham plant in northeast England. The facility produces CO2 as a byproduct for use in beer and stunning poultry and pigs before slaughter.

The announcement threatens the country with a carbon dioxide (CO2) shortage. It relies on CO2 as a by-product of ammonia production and if prolonged, the closure could have a significant impact on the wider food and beverage industry.

According to CFF UK, the reason for the halt is market conditions, i.e. it is uneconomic to produce ammonia with natural gas costing more than twice as much as it did a year ago. The company also states that marginal costs of ammonia are above $2,350 (£2,000) per tonne while global ammonia prices remain at about half that level. 

“We have consistently pushed the government to ensure a stable supply of CO2 and trust it has contingency plans in place should we lose this supply, but we do not anticipate any immediate problems for retailers,” said Andrew Opie, director of Food and Sustainability at the British Retail Consortium.

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A government spokesperson claims domestic stockpiles are better this year compared with late last year as there were “additional imports, further production from existing domestic sources” and it is up to the industry to act.

“While the government continues to examine options for the market to improve resilience over the longer term, it is essential industry acts in the interests of the public and business to do everything it can to meet demand,” the spokesperson said.

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The pressures on the CO2 market, however, continue to be high across Europe. Back in July, drinks companies in Italy said they are facing a CO2 supply shortage as some of the gas companies have cut volumes in the face of increasing energy costs. 

There is a spate of plant closures in the US as well which is spurring a widespread CO2 shortage and increasing concerns over continued supply chain issues in the Western world.

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