New deal for UK CO2 supply provides “some reassurance”
19th October 2021
The UK’s farming, food and drink industries have been under threat following the recent CO2 supply shortage.
UK businesses will now have access to the supply of CO2 until January 2022, following an agreement from the industry to pay more for the gas from fertiliser company CF Industries Holdings, which makes it as a by-product.
The government provided limited financial support for CF Fertilisers’ operating costs for three weeks in late September, whilst the CO2 market adapts to global gas prices.
The exceptional short-term arrangement allowed the company to restart operations and produce CO2 at one of its plants, after being forced to halt operations at Billingham and Ince due to high natural gas prices on 15th September.
A government spokesperson said: “CO2 suppliers have agreed to pay CF Fertilisers a price for the CO2 it produces that will enable it to continue operating while global gas prices remain high, drawing on support from industry and delivering value for money for the taxpayer.”
Commenting on the development, a spokesperson from the British Meat Processors Association (BMPA) said it provided “some reassurance that supplies will be maintained”.
However, BMPA added: “The industry has been given no detail on what the price will be or how it will be calculated going forward.
“We understand that business secretary Kwasi Kwarteng took the decision to temporarily exempt parts of the CO2 industry from competition law to facilitate this agreement.
“What we need now is some detail and transparency around how the new pricing structure will work.”
CF Fertilisers produces around 60 per cent of UK’s CO2 supply, used primarily by the food sector. As carbon dioxide is used to stun animals for slaughter and in the food packaging process – as well as in cheese, fruit and vegetables – farms, food producers and supermarkets have warned of the threat to food security.
Farming and food industry groups have warned the public they could see increases in prices and potentially empty shelves again over the next few months.
You can share your views with us on the CO2 crisis, or any other farming issue by emailing us at views@farmersguide.co.uk
